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Promoting Committee

Pencarelli Tonino (Editor in Chief), Cesaroni Francesca Maria (Co-Editor in Chief),

Demartini Paola (Co-Editor in Chief), Bocconcelli Roberta (Associate Editor), Del Baldo

Mara (Associate Editor), Pagano Alessandro, Sentuti Annalisa, Aureli Selena, Berti

Alessandro, Bravi Laura, Canestrari Silvana, Censoni Paolo Felice, Chamochumbi Diaz

Gail Denisse, Ciambotti Massimo, Cioppi Marco, Conti Emanuela, Curina Ilaria, Dini

Mauro, Ferrero Giancarlo, Francioni Barbara, Gabbianelli Linda, Giampaoli Daniele,

Murmura Federica, Musso Fabio, Palazzi Federica, Savelli Elisabetta, Sgrò Francesca.

Scientific Committee

Arcari Anna, Blackburn Robert, Cooney Thomas, Corsi Katia, Dagnino Giovanni

Battista, Dana Leo Paul, De Massis Alfredo, Del Chiappa Giacomo, Alex Douglas,

Dumay John, Susanne Durst, Esposito Emilio, Evangelista Pietro, Anestis Fotiadis,

Grandinetti Roberto, Paolo Gubitta, Guercini Simone, Luca Iandoli, Marchiori Michela,

Federica Pascucci, Passaro Renato, Parente Roberto, Pedrini Matteo, Perna Andrea,

Veland Ramadami, Silvia Ranfagni, Rippa Pierluigi, Ruisi Marcantonio, Santini Fabio,

Sciascia Salvatore, Songini Lucrezia, Tunisini Annalisa, Visconti Federico, Zanni

Lorenzo, Zucchella Antonella.

Table of Contents

INTRODUCTION TO THE PROCEEDINGS OF THE PICCOLA

IMPRESA/SMALL BUSINESS 6TH WORKSHOP: “NEW

PERSPECTIVES AND INTERDISCIPLINARY APPROACHES TO

ENTREPRENEURSHIP” 4

Full Papers 10

What can we learn from the first ‘like meat’ business Made in Italy?

New Business Models for the Vegan Production - Demartini, P,

Bernardi, C., Marii, A. 11

Food Safety: Exploring the Italian Agrifood case – Cesaroni, F.M.,

Chamochumbi, D.G., Palazzi, F., Sgrò, F. 31

Food safety and Innovation in Italian Agri-Food Enterprises – Del

Baldo, M., Ciambotti, M., Giampaoli, D., Sentuti, A. 48

The circular economy in the restaurant sector. The qualitative multiple

case study of piadinerias in Pesaro – Murmura, F., Savelli, E., Pierli,

G.,Vedovi, V. 62

Sustainability practice in first-generation family firms. Some empirical

evidence from the Scanian wine sector – Nilson, H., Sentuti, A.,

Cesaroni, F.M. 83

How is circular entrepreneurship created? Insights from a study on

Italian entrepreneurs – Mauro, S., De Chiara, A., D’Auria, A. 106

How does communication in SMEs change in the digital era? Some

insights from the entrepreneurial perspective – Conti, E., Savelli, E.,

Bocconcelli, R. 123

Crisis Management in SMEs: an empirical analysis in the Marche region

– Savelli, E., Murmura, F., Pierli, G., Vedovi., V. 143

Russia-Ukraine invasion: a study on the geopolitical and energetic

scenarios and the effects on the Italian SMEs – Strano, M.G., Rinaldi, S.

164

Financing innovative SMEs: has any progress been made? – Vannoni,

V., Nadotti, L. 183

Entrepreneurship & Networks: A Literature Review – Mutignani, F.,

Bocconcelli, R., Pagano, A. 195

Long Abstracts 210

Sustainable Business Models: the role of Collaborative and Integrated

Supply Chain – Correggi, C., Di Toma, P. 211

Rethinking business models for sustainability-oriented innovation:

implementing collaborative logistics in manufacturing SMEs – Galvani,

S., Carloni, E., Aiudi, A. 216

Enhancing SMEs’ resilience-building processes through business model

innovation. A systemic perspective to face entrepreneurial challenges in

times of crisis – Ruisi, M., Cosenz, F., Damiano, R. 224

Integrating ambidexterity and family governance for business model

innovation: a case study – Di Toma, P., Correggi, C. 229

Looking for factors doing migrant women successful entrepreneurs. An

exploratory study – Floris, M., Atzori, R. 235

Fostering Women Entrepreneurship under the lens of Agenda 2030. A

closer look based on a systematic literature review – D’Allura, G.M.,

Floris, M. 243

Does the sector matter? Italian Innovative SME’s and Board Gender

Diversity: impact on firms’ performance – Schiffiliti, V., La Rocca, E.T.

248

Women Entrepreneurship under the lens of Social Theory: The Italian

case – Bannò, M., D’Allura, G.M. 253

Design(ing) for the benefit of entrepreneurship – Kuura, A., Tomast, R.

260

Community Entrepreneurship: a literature review and research agenda –

Buratti, N., Albanese, M. 265

How Rural Entrepreneurship Benefits from Organic Consumers’

Personal Values for Peripheral Areas Development. The Case of

Girolomoni – Travasi, A., Mutignani, F. 272

Tensions in SMEs’ networks for sustainable entrepreneurship –

Cheschel, F., Lucarno, M., Marchiori, M., Tunisini, A. 280

The antecedents of entrepreneurial intention: A study of Albanian

university students – Makarova, M., Depperu, D., Sirianni, C.,

Cambrea, R.C. 290

Obstacles and Enablers of the Adoption of E-commerce in SMEs –

Mammadov, H., Del Baldo, M., Romero, I. 300

The role of Educational Digital Content Marketing in improving

customer engagement and small firms’ brand awareness – Francioni, B.,

Curina, I., Cioppi, M., De Cicco, R., Sigismondo, G. 305

Equity crowdfunding platforms to support innovative small business:

the Italian scenario – Paoloni, P., Modaffari, G. 312

Impact of resource interaction between a startup and a medium-sized

company in a business network – Dominidiato, M. 320

Innovative startups and social goals: how far are Italian firms from an

effective impact assessment? – Vannoni, V., Palazzi, F., Sentuti, A. 328

A case study of social impact evaluation in a regional non-profit

organisation: Identifying challenges and suitable measures. – Handley,

K. 335

Review on the digitalization of occupational welfare services in Italy

before and after the COVID-19 pandemic – Pezzolo, M., Del Baldo, M.,

Ascoli, U. 339

INTRODUCTION TO THE PROCEEDINGS OF

THE PICCOLA IMPRESA/SMALL BUSINESS 6TH

WORKSHOP: “NEW PERSPECTIVES AND

INTERDISCIPLINARY APPROACHES TO

ENTREPRENEURSHIP”

Roberta Bocconcelli

Francesca Maria Cesaroni

Alessandro Pagano

Annalisa Sentuti

Department of Economics, Society and Politics

University of Urbino Carlo Bo

Entrepreneurship has been recognized by the European Union as a powerful engine

for economic development, essential to seize opportunities, generating ideas and turning

them into financial, cultural, or social value for others (European Commission, 2013;

Bacigalupo et al., 2016; Mccallum et al., 2020). It is a key driver for the creation of new

businesses, but also for stimulating renewal and innovation in existing organisations

(Sharma and Chrisman, 1999). Entrepreneurship underpins all enterprising activity and

especially SMEs, which represent 99.8% of all businesses in the EU-27, employ around

83 million people, account for more than half of Europe’s GDP and have always been

essential for European economic competitiveness and prosperity (European Commission,

2022).

Contexts in which entrepreneurship takes shape and develops have been profoundly

changed by the Covid-19 pandemic (European Commission, 2022), the outbreak of war in

Ukraine (Accenture, 2022; EIU, 2022) and the increase in extreme events over the past

years (Rauch and Hulsink, 2023). Such phenomena, on the one hand, have put many

SMEs in crisis (OECD, 2022), at best forcing them to a fast reaction to rethink their

entrepreneurial and business models (Fasth et al., 2022); on the other hand, these events

have provided “the seeds for entrepreneurship” (Rauch and Hulsink, 2023, p. 662), as

they have generated new needs and new business opportunities (Pencarelli et al., 2020;

2022; Zutshi et al. 2021). Finding innovative solutions to deal with climate change and

improve resource efficiency, building social cohesion, speeding up transitions to a digital

and sustainable economy have become high priorities worldwide (Maglio et al., 2021).

Consequently, policies have to be adapted both for supporting existing entrepreneurs and

SMEs to deal with the new and challenging contextual situations, and for stimulating new

entrepreneurial initiatives, able to address the new challenges and needs.

The aim of the Conference was to draw a comprehensive and updated overview about

entrepreneurship, show the liveliness of this field of research and offer all

entrepreneurship scholars an opportunity for discussion and exchange useful for

generating interesting ideas for advancing research on this topic. Notably, we intended to

look deeper within the current complexity, aiming to understand the nature, meaning and

features of entrepreneurship in the current historical phase, in order to advance theory and

gain more insights that can be relevant for the knowledge of the entrepreneurial

phenomenon, even going beyond the mainstream views of the entrepreneurship field

(Welter et al., 2017). According to Welter (2011) context provides individuals

opportunities and sets boundaries for their entrepreneurial actions. Thus, it is crucial for

better understanding when, how, and why entrepreneurship takes place and who is

involved in the entrepreneurial process.

The first purpose of the PISB 2023 Conference “New Perspectives and

Interdisciplinary Approaches to Entrepreneurship” was thus to promote research on the

variety of contexts, their complexity and how they shape entrepreneurship. We intend

variety as the many facets of entrepreneurship within a plurality of contexts that includes:

- variety of setting: districts, communities, specific institutional and social

contexts;

- variety of sectors: creative industry, cultural industry, health care, digital

entrepreneurship, rural entrepreneurship, etc.;

- variety of values: green entrepreneurship, sustainable entrepreneurship, social

entrepreneurship, etc.

Each context is characterised by different levels of complexity and dynamics that can

be analysed with regard to antecedents, processes and outcomes of entrepreneurship.

A reciprocal relationship emerges between context and entrepreneurship (Welter,

2011): context influences entrepreneurship and in turn entrepreneurship shapes contexts

throughout individuals’ entrepreneurial actions, values and behaviours. A plurality of

subjects/actors can be involved in entrepreneurship: startuppers (Kuckertz et al., 2020),

young entrepreneurs, women entrepreneurs, entrepreneurial family (Randerson et al.,

2015), ethnic entrepreneurs, senior/silver entrepreneurs, benefit entrepreneurs, disable

entrepreneurs, etc. With this in mind, the second purpose of the workshop is to shed light

on the different traits of entrepreneurship by investigating different kinds of

entrepreneurs. Of course, contexts and actors cross each other and this gives rise to new

scenarios worthy to be better investigated: women entrepreneurs in the cultural industry,

digital entrepreneurship and social entrepreneurship, benefit entrepreneurs and sustainable

entrepreneurship, only to make a few examples.

Facing this complexity and variety means to deal with entrepreneurship by adopting

innovative and original methodological approaches and theoretical frameworks that look

outside the box, both from traditional disciplines including management, economics,

organisation studies, law, and finance and other disciplinary fields such as sociology,

psychology, anthropology, history. Thus the third purpose of the conference was to offer

insights into the ongoing debate on the need for a multidisciplinary approach to catch the

reality of contemporary entrepreneurship.

The eleven full papers and the twenty long abstracts in these proceedings have

contributed to the threefold aim in an original manner and with interesting results for

theory, practice and policy.

The variety of contexts in which entrepreneurship takes place emerges from many

contributions. They deal with a variety of sectors (i.e., food, energy, digital services) and

take a cross-sectorial view and thus witness the multifaceted nature of entrepreneurship in

different contexts: rural entrepreneurship, communities, starting-up, crisis, sustainability,

innovation, welfare. Overall, it emerges how entrepreneurship needs to invent new

business models and to rely on a new and evolving set of resources throughout networks

and relationships, that go beyond the traditional social capital perspective.

The current entrepreneurial scenario is characterised by different types of

entrepreneurs and different forms of entrepreneurship. On the one hand, papers presented

in this special issue show how particular types of entrepreneurs can affect the

effectiveness of processes such as innovation, digitization, and sustainability; SMEs,

small family firms, start-ups show a dynamic approach and flexibility to address

digitalization and innovation along with sustainability issues, despite the limitation due to

their size, even in times of economic downturn. On the other hand, the focus has been

placed on how the current challenging context impacts on the characteristics of specific

kinds of entrepreneurs who face the urgency to survive, adapt and evolve - as in the case

of woman entrepreneurship, migrant entrepreneurship or first-generation family firms.

In most articles, the need to enrich the field of entrepreneurship research by drawing

from other disciplines (sociology, psychology, economic geography, etc.) emerges. Many

authors also agree that a multidisciplinary, or interdisciplinary, approach can provide a

valuable contribution to the development of knowledge on entrepreneurship and to

shedding light on its multifaceted nature and current complexity. Contributions from other

disciplines can also stimulate the adoption of new theoretical perspectives and

methodological approaches. Also in this regard, the papers presented in this special issue

offer a wide variety of research approaches, methods, both qualitative and quantitative.

They show the variety of tools available to scholars to enrich this field of research and

pave the way for new directions for investigations concerning the various dimensions of

entrepreneurship: individual or team level, venture and firm level, and context and

macroeconomic level (Carlsson et al., 2013).

In conclusion, this volume confirms that, although entrepreneurship research has

flourished and experienced rapid growth in recent years, it still represents a challenging

and promising field of research. There is much room for future advances in knowledge, to

be realised through future theoretical as well as empirical and applied research.

Acknowledgments

The Scientific and Promoting Committees of the 6th PISB Workshop are grateful to all

the participants, the chairs, the keynote speakers, and the University of Urbino Carlo Bo

for having actively contributed to the success of the conference which dealt with a very

important topic for the economic and social development at the european, national and

local level.

References

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enterprises response to Covid-19: The effect of external openness and procedural

management. International Small Business Journal,41(5), 465-487.

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Kuckertz, A., Brändle, L., Gaudig, A., Hinderer, S., Reyes, C. A. M., Prochotta, A.,

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Randerson, K., Bettinelli, C., Fayolle, A., Anderson, A. (2015), Family

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Full Papers

What can we learn from the first ‘like meat’ business

Made in Italy? New Business Models for the Vegan

Production

Paola Demartini

Department of Business Studies, Roma Tre University

Via S. D'Amico 77 - Rome (Italy)

E-mail: paola.demartini@uniroma3.it

Cristiana Bernardi

The Open University Business School, The Open University

Walton Hall, Milton Keynes MK7 6AA, UK

Adriana Marii

University of Roma Tre

Via S. D'Amico 77 - Rome (Italy)

Abstract

Recent years have seen a rise in the popularity of vegan or plant-based

consumption/production, which is deemed to reduce environmental burden (Fresán &

Sabaté, 2019) since the impacts of animal products can markedly exceed those of

vegetable substitutes (Poore & Nemecek, 2018).

Our research focuses on sustainable business models applied to vegan production with

the aim of scrutinising how companies positively impact people, the planet, and

sustainable economic performance. Surprisingly, academic studies by management

scholars on this matter are very rare, and we have discovered that most contributions

come from researchers with knowledge and expertise in other disciplines such as

environmental science or agricultural and biological sciences.

In light of the above-mentioned literature gap, first, our research offers an

understanding of how sustainable business models can be applied to vegan production.

Namely, we elucidate the concept of Circular Bioeconomy and its applications through

biocyclic vegan production and cultured meat production.

Then we focused on a paradigmatic case study, a small Italian company that produced

the first “vegan meat” Made in Italy, to find out if all the theoretical concepts we have

previously discussed can be used as a lens to understand the dynamics of the sector.

Our research has not only theoretical implications calling for an interdisciplinary

approach to advance management research in this field but also managerial implications

for vegan food production, which is undergoing a phase of evolution both in terms of

technologies and markets.

Keywords – Sustainable Business Model, Vegan food production, Circular BioEconomy

Paper type – Academic Research Paper

1. Background

The concept of vegan was “invented” in 1944 by Donald Watson, a founder of The

Vegan Society. It refers to a vegetarian diet that excludes eggs, dairy products and all

other animal-derived ingredients. Watson wanted to underline the importance of using not

only alternative non-animal products in general but also encouraging a vegan lifestyle that

avoids the use of any kind of product with any animal ingredients or components (Judge

& Wilson, 2015). The “veganism style” is not new but has raised awareness and attention

in the last few years (Statista, 2018). It is not applied only to food but also to general

products, like cosmetics or hygiene products, and it is considered a real lifestyle that

produces less harm for animals and the planet (Beardsworth, 1991; Loh et al., 2021;

Gendel-Guterman& Derqui, 2021).

Due to customers’ growing attention to health and climate change, the global vegan

food market is expected to grow in the following years, passing from $23.31 billion in

2020 to $61.35 billion in 2028 (Fortune Business Insights, 2020).

In Europe, the biggest and most important companies in this market are: Danone SA,

Hain Celestial Group, Inc, Conagra Brands, Inc., Beyond Meat, Inc., and Nestle SA;

companies like these sell their products to retailers, which are mainly

supermarkets/hypermarkets, online websites, convenience stores, etc. Most consumers

make their purchases in supermarkets or big retail stores, but since the pandemic started

in 2020, e-commerce for vegan products has also grown, based on data provided by

Google AdWords, which has shown a growth of 47% of vegan product searches since

2020 (Saari et al., 2021). In summary, the market for vegan food is continuously

expanding and is influenced by customers’ choices driven by both health and

environmental concerns (Apostolidis & McLeay, 2016; Dedehayir, 2017; Carfì et al.,

2018; Cooper et al., 2022).

In addition to these statistics and market trends, this paper will discuss the application

of business models based on the newest and recent Circular Economy principles for vegan

production with a focus mainly on the food system and the small business sector.

The purpose of our study is to investigate if innovative companies focusing on vegan

production engage circularity in their activities and strategies, multiplying their

opportunities to not only produce less harm for the environment, but also increasing

economic and social value.

Hence, the main research question of our research is the following:

- What are the main key aspects of new business models applied to vegan food

production?

Our research applies an exploratory research approach to analyse the application of

sustainable strategies derived from the Circular Economy to vegan production.

Subsequently, we focused on a paradigmatic case study, a small Italian company that

produces and sells vegan products, to find out if the theoretical concepts we have

discussed can be applied in the business model of a pioneering vegan business.

Our contribution as management scholars is to delve into a hot topic issue, such as the

production of vegetal substitutes and alternative proteins.

In this still gray field, the application of technological and process innovations to

business activity must follow principles of responsibility and impact assessment that

consider individual and collective and private and public interests. Food production is a

key issue for humankind’s survival and represents what we call a wicked problem.

Producing alternative proteins may be an option to reduce environmental impact and

respond to the problem of food scarcity, but the phenomenon must be studied in depth,

and from a multidisciplinary and interdisciplinary perspective. Without a thorough

understanding of the short, medium and long-term impact, the risk is that the interests of a

few will prevail over those of the community.

The reminder of the paper is structured as follows: section two presents the research

design and the methodological issues we faced; section three illustrates how companies

that produce plant-based food, or companies that decide to shift their strategy towards a

sustainable vegan one, can reduce the harmful effects of their processes and generate

positive impacts on the environment and human health; in section 4 those concepts are

used as a lens to analyse a paradigmatic case study; conclusions are drawn in section 5.

2. Research Design and Methodology

A preliminary literature review was conducted by using the following keywords:

“vegan production” and “circular economy” or “vegan company” and “business model”

or “sustainable production”. These keywords were selected to find as much information

and research, and as many case studies as possible, both on the SCOPUS database and

google scholar platform.

Surprisingly, academic studies by management scholars on this topic are very rare,

and we have discovered that most contributions come from researchers in other

disciplines such as environmental science or agricultural and biological sciences.

In light of this literature gap, our research, based on secondary data (i.e., academic

and grey literature), offers an understanding of how new business models may be applied

by vegan companies. The circular economy, in fact, has various variants and applications

(Brown et al., 2021; Alcade et al., 2022; Hofmann et al., 2022) which lead to the

possibility of developing new models applied to vegan companies.

The outcome of our study is an “explanatory journey”, which starting from the

Circular Economy applications, combined with the Green Economy principles, leads to

new business models for vegan companies. These concepts will be our lens in the analysis

of a paradigmatic case study that will help us to answer our RQs.

The case study we selected is the Italian vegan start-up Joy Srl., which was founded in

Piegaro (PG) by the Musacchio family in 2014 in order to bring a healthy, sustainable and

100% plant-based diet to Italy through a collaboration with the Wageningen University

and the development of a facility of High Moisture Wet Extrusion. These factors have led

to the creation of the first “vegan meat” Made in Italy.

Data on the case study were collected and put together from different sources, such as

interviews, articles, videos, etc. In particular, materials have been found through web

research on the main website and social network pages.

Moreover, articles and journal papers have been collected to study its past successes

and actions related to its strategy and work, which aided us in obtaining a clearer

overview of the company.

Lastly, a semi-structured interview with the owner of the company has been carried

out. Semi-structured interviews are characterised by a high level of flexibility and the

capability of disclosing important and hidden information and, furthermore, are useful to

introduce more detail and richness thanks to their more open-ended nature (George,

2022).

3. New Business Models for Sustainable Development Applied to Vegan

Production

Since new production systems, which are based on the application of the Circular

Economy principles have been implemented in the vegan sector in the last decade, in the

following section, the main features of new business models for sustainable development

will be briefly depicted before analysing the deployment of specific technology used in

vegan food production.

3.1. Circular Economy, Bioeconomy and Circular Bioeconomy

One of the most powerful tools and keys to changing the way of producing and doing

business has been the passage from the old business models and the old producing

mechanisms and processes to the new concept of “Circular Economy” (CE), which has

been defined as “an economic system that emerges to oppose the linear open-ended

system (produce, consume, dispose), with the aim to accomplish sustainable development,

simultaneously creating environmental quality, economic prosperity and social equity to

the benefit of current and future generations” (Homrich et al., 2018; Reike et al., 2018).

Connected to this concept, we can consider “bioeconomy”, which essentially relies on

biological inputs that are used in production instead of fossil fuels and non-renewable

resources. “Bio-based economy” or “knowledge-based bio-economy” (BE) underlines the

importance and power of biological resources from land and sea for the manufacturing of

products, by substituting fossil fuels with the biomass integrated with biotechnology

innovations.

Bioeconomy products consist of biomass and low-value products (i.e., biofuels) and

high-value products, such as bio-based chemicals or compounds (McCormick and Kautto,

2013).

If we think about the application of a BE in management production, for example,

food production, there must be proper management of the resources, which is often

characterised by a high level of uncertainty, in order to be truly sustainable.

Indeed, the use of biomass for unsustainable food production can lead to negative effects

on the environment, such as deforestation, and on society; for this reason, institutions

must release proper regulations and policies not only globally but also in Europe, in

particular, as BE policies tend to prioritise economic value rather than environmental and

social value (European Commission, 2018).

A BE, as understood from its definition, can be linked to the CE and transformed into

“circular bioeconomy” (CBE), which refers to the concept of bioeconomy integrated with

elements of CE (Institute for European Environmental Policy; Kershaw et al., 2021;

Muscat et al., 2021).

Since we are discussing vegan production, the Plant Based Products Council, which is

the leading organisation that promotes sustainable products derived from nature, firmly

promotes the circular bioeconomy through the creation of renewable products at the

market scale and supports policies that ensure vegan products become part of the circular

bioeconomy. Taken together, these actions reduce carbon emissions, improve water

quality, enrich our soil health and curtail solid waste destined for landfills (Plant Based

Products Council, 2022).

Some initiatives, such as “The Economics of Ecosystems and Biodiversity”, state that

all three concepts (Circular Economy, Green Economy and BioEconomy) are linked by

the interest and effort to preserve nature and, in general, are applied based on the same

concepts (D’Amato, 2021). It is necessary for these models to be adopted by companies

to substitute the old ones, so they can face environmental issues and meet the new

requirements established by policy makers and institutions.

For this aim, the inclusion of these principles in a company business model applied to

vegan production can ensure positive impacts on the planet and society.

3.2 Biocyclic-vegan Production

In the following section, we will discuss a new trend named the “biocyclic-vegan”

label that was introduced in Germany in 2017. It basically refers to the exclusion of any

animal by-product during production.

The concept is based on a vegan approach and, indeed, in 2016, the producer

association “Biocyclic-vegan cultivation” was founded. Their task is to support the

biocyclic vegan agriculture by following the guidelines provided by The International

Federation of Organic Agriculture Movements - Organics International (IFOAM Organics

International).

This new production methodology is based on the combination of organic agriculture and

stock-free agriculture, which emphasises the importance of using natural resources and,

meanwhile, enables them to ensure their availability in the future, meaning that they do

not have to be depleted.

Essentially, it is primarily based on excluding materials such as horn meal, blood meal

and composted manure from farming in the land cultivation, and, as it aims to re-establish

a healthy life cycle, coherent with the concept of a closed-loop approach, it is followed by

a compensation for the resources that are used to guarantee their availability in the future.

Biocyclic-vegan production, in particular in the agriculture sector, is strictly based on

the total exclusion of animal products and farm animals, a strategy which strives to persist

in the following years, in particular in Germany.

The first countries in which vegan biocyclic was introduced and applied are Germany,

Austria and Switzerland. They are also the ones which have followed the labelling

guidelines since 2016, to be transparent about their production methods (Jürkenbeck et

al., 2019)

3.3 Alternative Meat (plant-based and cultured meat) Production

Since is it expected that animal products will be requested even more by consumers,

there is an urgency to increase the production and distribution of alternative products,

especially alternative meat products made through innovative food technologies able to

reproduce the taste and texture of real meat and meat-based products.

The University of Nottingham (2018) has defined alternative protein as follows:

“Alternative protein, such as plant-based meat substitute, or edible insects, provides a

substantial amount of protein, but requires less natural inputs (e.g., water) to produce,

compared to the most common and conventional protein sources (i.e., meat and fish).

They are also called ‘novel food proteins’ and are composed of different sequences of

amino acids, which are responsible for building lean body tissues and human health.”

An alternative protein of plant-based meat basically refers to alternatives to

meat-based protein, which replace and replicate it not only in the taste and texture, but

also in nutritional characteristics, by trying to be even more economically convenient than

meat, contribute to the environment and decrease the negative health impacts derived

from meat production (Wild et al., 2014; BCG, 2021).

One of the most important reasons to produce alternative protein and to adopt a

different diet consists in the awareness of human health.

Meat causes diseases such as cancer and obesity in relation to its high level of

saturated fat and cholesterol, while AP proposes funnelling its same nutritional benefits

related to the level of protein and essential nutrients with relatively low levels of

cholesterol, saturated fats and nitrates. (Chen & Eriksson, 2019)

Cultured meat, instead, is produced by culturing animal cells in vitro using tissue

engineering techniques and is presented by its advocates as a good alternative for

consumers who want to be more responsible regarding the increasing demand for food by

the growing human population but do not wish to change their diet (Chriki & Hocquette,

2020; Reis et al., 2020).

Alternative meat (i.e., plant-based and cultured meat) produces smaller negative

environmental impacts with smaller GHG emissions, land use and water, but at the same

time, since it involves activities which are highly processed and request a huge amount of

energy, it can also be a threat for the environment (Tuomisto & Teixera de Mattos, 2011).

This new production system is expected to acquire more attention from companies

due to the growth of the demand for protein and the expected failure of traditional meat

production, which would allow for the creation of new opportunities (Mancini &

Antonioli, 2022).

Shifting to new sectors, plant-based meat can oﬀer farmers the opportunity to

diversify or completely change to the production of plants, algae, mycoprotein, seaweed,

etc., and, at the same time, provide opportunities to companies by enlarging their offering

and their markets (Luiz Morais-da-Silva et al. 2022).

However, not all scholars agree on the positive impacts of the production of

alternative meat on people and the planet. Despite the promising purposes of these

products, at the same time, there are doubts about the processing activities of AP, which

can be considered as “ultra-processed food” (Monteiro et al., 2019). Indeed, health care

institutes recognise that processed food can be linked to some health issues and diseases

such as obesity, diabetes, etc, related to the presence of additives or flavour enhancers.

Moreover, by analysing a study conducted on the effects of the production of cultured

meat, (Tuomisto & Teixera de Mattos 2011) it has been seen that, by calculating the

energy input of cultured meat, this could be relatively high due to the additional processes

involved; however, this high energy consumption could be decreased by adding and

improving various technologies. Table 1 summarises positive and negative aspects of the

production of alternative meat.

Table 1. Positive and negative sides of the production of alternative meat

Health

Economic

Environmental

Positive

Benefits that come

from the reduction of

meat consumption.

Possibilities for companies

to expand their market;

possibilities for farmers to

enlarge their offering by

diversifying or completely

changing

Reduction of GHGs

Negative

Ultra-processed food

which is doubted to

be healthier

Increase in land use in

order to grow the inputs

necessary

A huge amount of

energy used

3.4. A Summary of Different Vegan Production Systems

In order to answer our RQs, table 2 summarises the characteristics of the three main

vegan and plant-based productions, which incorporate principles of Circular Economy,

Green Economy and BioEconomy in their business models. Other than proper vegan

products, it has been important to also take into account the newest production system for

cultured meat, which is done by using the same principles of AP products (i.e.,

bicyclic-vegan products), with the involvement of technologies to recreate protein

products and alternatives to the real meat.

Table 2. A picture of different vegan productions

Type

Description

Benefits

Categories

Biocyclic-vega

excluding materials such as

horn meal, blood meal and

composted manure from

farming in the land

cultivation

using natural resources

and enabling them to

ensure their availability

in the future, which

means that they do not

have to be depleted.

aims to re-establish a

healthy life cycle

Algae protein; yeast;

mycoprotein

Plant-based

Protein products made from

natural resources, alternative

to real meat in texture,

flavours and aspect.

Eco-friendly, more

sustainable, nutritious

and healthy and more

affordability

Pulses/legumes;

Seeds; cereals;

Seaweed. e.g. Pea,

soy, chia seed, etc.

Cultured meat

cellular agriculture and is

molecularly identical to

conventional meat but

produced through

bioprocesses from animal

cells extracted through

biopsies

environmental and

health benefits, reduced

risk of contamination

and food borne illness,

as well as being more

ethically acceptable

In vitro cultured

meat cells

4 The Case Study of the Italian Vegan Start-up Joy Srl

Our next step is to understand if the application of the circular economy in vegan

production is effective in terms of business sustainability.

Beyond the insight into new technologies for the production of alternative proteins,

we will describe the business model of the small enterprise selected as an innovative

start-up in plant-based production. Hence, for the purpose of our study, we have

conducted a semi-structured interview with the entrepreneur, on the basis of the following

research questions:

Materials, resources

Where do you find raw materials?

What are the main resources used in the process?

Is it sustainable? Is it harmful for our health?

Technologies and innovations

How do you produce the plant-based products?

How does your technological process work?

Is your production system sustainable?

Distribution channels,

Revenues streams, costs

Future expectations

What are your main distribution channels?

Do you collaborate with other companies?

What are your business costs?

What are your future projects and expectations?

4.1 The Context

The selected case study is the Italian vegan start-up Joy Srl., which was founded in

Piegaro (PG) by the Musacchio family in 2014 to bring a healthy, sustainable and 100%

plant-based diet to Italy through a collaboration with the Wageningen University and the

development of a facility of High Moisture Wet Extrusion. These factors have led to the

to the creation of the first “vegan meat” Made in Italy.

Looking back, the founder of the company, stopped eating meat when he was 19 years

old and later with his wife and family opened a hotel, where they offered only vegetarian

food to the customers. In 2002, the English Vegetarian Society even rewarded this Hotel

with the “Best Vegetarian Hotel Award”. Given that the world has started to be more

oriented to vegan food and that new technologies have been created to produce alternative

products to the traditional ones, the entrepreneur decided to create Joy Srl. in 2014.

In 2019 a food line based on plant-based protein products called “Food Evolution”

was launched (available at: About – Food Evolution). The first product proposed by the

company was the “impossible chicken”, which is a plant-based chicken produced by a

technology able to reproduce the same texture of real meat with the same flavour.

This product is made with soy protein, vegetable fibres, sunflower oil, flavourings,

spices and aromatic herbs. These seem like basic ingredients, but the secret lies in the

technology as explained by the small entrepreneur in an interview done in 2019:

“The products are made by using a technology developed in the Netherlands at the

Wageningen University. It stretches the protein cell into a filament. It's like making pasta:

a mechanical and thermal process but with gigantic machinery. You can have a product

with the same taste and texture as meat, but 100% plant-based. […] This technology —

he adds — allows the thermocoagulation of the product; that is, it is not altered if it is

soaked in a sauce or oil (Vegolosi.it, 2021).

As it happens, since Food Evolution was the first Italian and European company to

produce “fake meat” through this new process, an insight into this type of technology is

useful to understand why their products are sustainable for the environment and reflect

the principles of the Circular Economy.

In 2019 the products produced by the company with this technology were restricted

from 8 products (3 vegetarian and 5 vegan) to products that are only 100% vegan (i.e.,

fake chicken, beef, bacon, etc.), a choice primarily made due to the increase in their

request.

Indeed, they have stated that their fake chicken is 100% vegan, gluten-free and has a

high percentage of protein (from 22% to 25%). Furthermore, in 2019, all of their products

obtained the “Quality Award 2019” (available at: Joy presenta la linea Food Evolution |

Distribuzione Moderna, 2019).

The current company products, which are 100% vegan and include fake chicken, beef

and burgers, are made of simple ingredients, such as extruded soy protein (water, soy

protein 35%, vegetable fibre, natural flavour), sunflower oil, yeast extracts, salt

seasoning, natural flavours and spices (Food evolution website, 2022).

In 2021 TuttoFood rewarded the firm with second place in the innovation prize for

their fake chicken meat called “ParePollo” in the category “Better Future Award 2021”

organised by the Gdo Week and Mark Up.

Their products have become popular due to an increased demand from not only

vegetarians and vegans but also omnivores who care about the environment, animal

welfare and their own health (available at: Gli straccetti ParePollo di Food Evolution

vincono il premio Innovazione al TuttoFood 2021 - VEGANOK).

Based on an interview done with VEGANOK in 2019, the founder said that, in order

to get omnivores to approach or switch to this diet, it is not effective to provide only basic

products, such as tofu, tempeh, seitan or legumes; it is necessary to produce alternative

products which are as similar as possible to meat, and which replicate the same texture,

flavours and experience of real meat, with the main difference that is not as harmful as

meat-products (VEGANOK Speciale azienda: Food Evolution la vegan meat 100%

italiana – VEGANOK TV).

The company is now also working on producing and developing products called

“fake-fish” because the entrepreneur believes that it is necessary to provide not only meat

substitutes but also fish substitutes to people that are used to consuming them (Table 3).

“What has happened in the last year and a half with the pandemic should have taught

us that investing in plant-based products, by now, has become an obligation. However, we

must make sure that the products become better, push innovation on quality and

mainstream consumers: it is the only way for the plant-based counter at the supermarket

to be successful (interview made by Vegolosi.it)

Table 3. Chronological excursus of the most important events

Year

Event

2017

Foundation of Joy Srl., a company which produces only vegetarian and vegan products.

2019

Restriction from 8 products (3 vegetarian and 5 vegan) to products that are only 100%

vegan (i.e., fake chicken, beef, bacon, etc.)

2019

All of their products have obtained the “Quality Award 2019”

2020

Their products started to be sold in big supermarket chains, such as Esselunga

2021

TuttoFood rewarded the firm with second place in the innovation prize for their fake

chicken meat called “ParePollo” in the category “Better Future Award 2021”

4.2 A Sustainable Business Model for Vegan Production

In the figure below is the Business Model Canvas of the company which underlines

the most important key elements connected to the Circular Economy Model.

Overall, based on the entrepreneur’s interview, the company is working on respecting

the ecosystem by minimising their CO2 emissions and using innovative technologies and

natural ingredients which replace the use of harmful and fossil raw materials.

4.2.1. Products and Market

“Soy is, by far, the cheapest legume that exists, and, to produce our products, we use

the cheapest production material that exists, and the most protein-based one, to satisfy the

requests of consumers, and, most of all, the health and nutritional requirements that

people need […] Humans need the protein to live, and this is the most controversial part

of the animal production industry. Indeed, if we give the animal the protein (i.e., soy) and

then we eat the animals, we lose a high percentage of the power and the benefits of the

protein contained in the legume” (interview).

The philosophy of the firm is based on the necessity to make real changes by being

proactive and being part of the system, especially to make the real revolution through

being present in supermarkets and interfacing with the large associations of producers,

with the large-scale retail trade (e.g., Vegolosi.it, 2021).

Considering the retailers, their products are sold both through online and offline

channels.

In April 2020 their products started to be sold in big supermarket chains, such as

Esselunga (Esselunga: in arrivo la carne vegetale Food Evolution | Distribuzione

Moderna, 2020), vegan mini-markets or markets (i.e., “Vivi Bistrot Roma”, “De

Gustibus”, “IVegan Roma”, and “Aliper”) (Store Locator – Food Evolution).

4.2.2 The Process

In 2019 it was made an interview on “NX-Food” in which the founder declared that

they managed “to create a ‘meat-like’ structure which is absolutely unique, and that their

industrial line meets the top efficiency criteria and features the most advanced technology

and hygienic conditions (i.e., high care chamber production).

To make the “fake meat” the owner explained again that they use “this process with a

high percentage of water in order to knead the protein flour; then, the proteic cellular has

to be stretched at around 120-150 degrees in order to pre-cook the product. Afterward,

the product goes through a laminator (i.e., a very cold stainless-steel tube), where the

exchange of temperature, from really cold to hot makes, the cell close and the result is a

product with high fibers. Indeed, this product has the exact texture of the meat due to the

high presence of these fibers with close cells, which makes the product highly resistant”.

Overall, “The process is similar to the one that is used to make pasta” (i.e., for

example, the one that uses Barilla), and to debunk the myth of the “highly processed

food” he affirms that it is a false belief because “every food, even basic pasta, is

processed.”

The company is actually independent in its activities since they do everything in its

plant in Perugia; for this reason, they do not collaborate or rely on other companies.

4.2.3 Weakness of the Business Model

The founder provided a quick summary of how the plant-based market has developed

by saying that it began to be “popular” when, a few years ago, people started to invest in

big companies, such as Beyond Meat, which led people to continue to invest even more in

the following years. However, this mechanism was not applied in Italy, and still

nowadays, there is not enough return on investment to develop the market like in the US.

“The value of the total plant-based Italian market is only € 50 million, which is really

low considering the fact that it also includes big and famous companies, such as Valsoia,

Kioene, Findus, etc”.

For example, Food Evolution has been working on producing a vegan sausage for two

years but is still not able to put it on the market because there is not enough financing

from outside the company. “There is still a high amount of greenwashing which makes it

difficult for investors to see what is really sustainable and what is not.”

“The company, at its foundation, decided to invest around €10 million to build their

establishment in Perugia to be able to produce high-quality products independently.

Other firms, on the contrary, decided to invest their money in marketing advertising and

the production of their products in other countries where the cost of production is lower.

Food evolution would now require more €4 million to also develop marketing, but

nowadays it does not have a sufficient amount of money”.

This is a main weakness of the company because, in order to reach more consumers

and sell more products, the company should increase Italian people’s awareness to show

them that these kinds of products exist.

The owner added that a lot of people comply with the fact that plant-based products

are more expensive than meat. The prices of plant-based products sometimes are higher

than the meat ones because the amortisation costs are split on a smaller production. “But

people do not consider that in order to produce meat products there are a lot of

investments involved to support it, but they are distributed over a large amount of

production, which reduces the final cost of the product for the consumers”.

During the interview, the owner said openly that the company is now suffering from a

high decrease in sales, which results in a lower income in comparison to previous years.

4 Discussion and Conclusions

This case study has helped us to integrate a new business model, based on vegan food

production, with the uncovering of the high moisture extrusion production system.

By analysing the processes and the strategies applied by the company, we can assert

that they are working through a circular model since they have aimed to optimise the

economic processes of production and consumption in the use of the resources that

underlie all the products.

Furthermore, the process of high moisture extrusion can be associated with the

“circular bioeconomy” (CBE), which we have seen refers to the concept of bioeconomy

integrated with elements of CE (Institute for European Environmental Policy).

We could say that the example of Food Evolution has confirmed our initial statements

since the starting point of our study focused on the possibility of using new technologies

and the overall effects on the environment.

Firstly, it is possible to produce products by using mostly natural raw materials (i.e.,

legumes, vegetables, soy, etc.) and natural resources; moreover, it may reduce the amount

of CO2 emissions which, as said before, are mainly methane and nitrous oxide. Hence,

the reduction of emissions and negative consequences on the environment has been

confirmed by the production of fake meat. However, as it happens when new technologies

are applied, there are some new environmental impacts to take into consideration, since

some scholars advocate that this process will require more energy levels and the

consumption would be on the higher side in order to maintain the moisture content.

This leads us to the open question of whether this process can be included in the

concept of “responsible innovation”, which can be realised with the contribution of

circular bioeconomy through the usage of innovations and technologies, across

sociotechnical systems, knowledge-producing and decision-making capacities, yet

involving a broader range of actors, such as societal stakeholders, humanities, and

sciences, with the aim of balancing social and environmental issues (Kershaw et al.,

2021).

This case study has helped us to integrate our analysis with the perspective of the

vegan production applied by a small Italian company and revealed some of the weak

points of the business. First and foremost, there is a need for funding to support a business

that has not yet reached break-even volumes. It is evident that if we want small start-ups

to be able to survive independently, without being swallowed up by large multinationals,

policies that support companies with plant-based products, and stimulate more

investments, should be implemented.

Our study opens up future research in three different but interrelated directions:

- First, as our case study shows that the application of new sustainable business

models is not a sufficient condition for a business to be economically sustainable.

This is especially true when new technologies require considerable investments;

small entrepreneurs alone do not have the financial resources to be able to realise

innovative projects. This aspect is worthy of an in-depth study and offers insights

both with regard to the search for partnerships between large and small

companies and the evaluation of public policies to support particular sectors of

our economy.

- Then, our need for an in-depth analysis is related to the technological production

process of AP products, especially of the high moisture extrusion applied not

only by the Food Evolution company but also by the majority of vegan food

producers. This process appears to be sustainable since it produces fake meat and

leads to the reduction of intensive farming, which is connected to the production

of CO2 emissions, However, at the same time, the process requires a

consumption of energy levels, for which the precise amount is still unknown. The

data that we have available right now are still not sufficient enough to provide

proper answers to these questions.

- Finally, there is still an ongoing discussion about alternative meat and its real

effects on the environment and human health, being “ultra-processed” food.

To deepen this debate, we deem future research should embed an interdisciplinary

approach with inputs from scholars in biotechnology, human nutrition, medicine

and management.

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Food Safety: Exploring the Italian Agrifood case

Francesca Maria Cesaroni

Department of Economics, Society and Politics (DESP)

University of Urbino Carlo Bo

Via Saffi, 42, Urbino, Italy

E-mail: francesca.cesaroni@uniurb.it

Gail Denisse Chamochumbi Diaz

Department of Economics, Society and Politics (DESP)

University of Urbino Carlo Bo

Via Saffi, 42, Urbino, Italy

E-mail: gail.chamochumbidiaz@uniurb.it

Federica Palazzi

Department of Economics, Society and Politics (DESP)

University of Urbino Carlo Bo

Via Saffi, 42, Urbino, Italy

E-mail: federica.palazzi@uniurb.it

Francesca Sgrò

Department of Economics, Society and Politics (DESP)

University of Urbino Carlo Bo

Via Saffi, 42, Urbino, Italy

E-mail: francesca.sgro@uniurb.it

Abstract

The aim of this paper is to explore food safety in Italian agri-food firms. By adopting

five safety culture/climate components – leadership, internal communication,

commitment, resources, and risk awareness – we intend to provide an overview of the

firms’ attitude towards the importance of food safety and its barriers and drivers, with a

focus on their geographic localization. To achieve our goal, we analyzed a population of

4614 Italian firms by administering a questionnaire which yielded a response rate of 5.8%

(270 firms) Findings showed that the main differences concerning the food safety

culture/climate regard firms located in central Italy as opposed to those located in the

north of the country. Specifically, these differences concern the level of commitment and

of risk-taking awareness. Moreover, results showed that a lack of financial resources

represents a significant barrier to adopting food safety practices, especially for firms

located in the south. Finally, the values espoused by top management and the prospect of

improving performance appear to play a key role in promoting the introduction of food

safety systems in organizations. Relevant theoretical and practical implications emerged

from this study.

Keywords – food safety, culture/climate food safety, agri-food, drivers, barriers, Italy

Paper type – Academic Research Paper

1 Introduction

The global agri-food sector – mainly composed of micro, small and medium-sized

firms – is one of the most important industries worldwide, including Europe (FAO 2020,

Food Drink Europe, 2020). In the last decades, the industry had to address (and will

continue), a context fraught with challenges related to climate changes, geo-political

tension, pandemics, and food crises (OECD, FAO, 2022), all of which has resulted in an

increased focus on ‘food safety’ (FS) issues. Nowadays FS is recognized as a crucial

factor in achieving the goals of the 2030 Agenda, such as No Poverty (SDG 1), Good

Head and Well-being (SDG 3), and Responsible Consumption and Production, (SDGs 12)

(Yadav et al. 2021).

Governments and regulators, in Europe and around the world, have to include FS in

their quality assurance strategies (Hobbs et al., 2005; Brunori et al., 2013; Giannelli et al.,

2021); consumers have become more conscious of food hazards and ask for higher

standards of food-safe quality (Eurobarometro, 2019; Agnati et al., 2021); consequently

agrifood businesses have been forced to revise their business models (Del Baldo, 2022),

by integrating their corporate strategies, adopting public or private standards or

implementing food safety management systems (FSMS) (Asioli et al., 2014; De Boeck,

et. 2017; Corallo et al., 2020).

Despite the fact that governments/regulators and agrifood businesses are aware of the

existence of food risks and have – respectively – imposed and adopted many preventive

practices (such as standards and FSMS), the risk of food-borne diseases continues to be a

source of concern (Griffith, 2006; Onjong et al., 2014). That indicates the shortcomings of

preventive practices, raising questions about the efficacy of these systems to fully

guarantee food safety.

Faced with this dilemma, scientific literature has investigated, on the one hand, the

reasons for such failings. They might be found to result from the fact that FSMS are

elaborated differently in practice (FAO, 2007; Kirezieva et al., 2015) and are not always

well adapted to cope with the conditions inherent in the context in which the firm operates

(Luning et al., 2011; Kirezieva et al., 2015). However, others argue that the effectiveness

of standards adoption or FSMS appears to be very much dependent on the human factor,

responsible for the application of practices (Insfran-Rivarola, 2020). This has led to the

recognition of FS culture/climate as a key contributory factor to the FS performance of

food establishments (Yiannas, 2009; Griffith et al., 2010a, b; Powell et al., 2011).

On the other hand, literature has focused on the barriers and drivers which influence

the adoption of FS preventive practices. Several obstacles are identified, particularly in

agrifood SMEs (Asioli et al., 2014; Corallo et al., 2020, Palazzi, Sentuti, 2021), such as

lack of financial resources and funding; absence of qualified human resources; lack of

technological resources; lack of information and knowledge about standards or FSMS.

Scholars have also identified numerous drivers which encourage FS practices (Karaman

et al., 2012; Asioli et al., 2014; Corallo et al., 2020): obligation to comply with

regulations; pressure from the external environment (consumers, retailers, others

stakeholders).

Although FS is now subject to much discussion by scholars (Yiannas, 2009; Griffith

et al., 2010a, b; Powell et al., 2011; De Boeck et al., 2015; De Boeck et al., 2017) and

institutions at different levels, it remains a complex topic. The FS culture/climate is still

poorly understood (Jespersen et al., 2017; De Boeck et al., 2015), and empirical evidence

remains scarce, particularly regarding the Italian context. Furthermore, the scientific

literature is still limited on the question of barriers and drivers.

Taken all this into account, this study aims to explore food safety in Italian agri-food

firms. By adopting five safety culture/climate components – leadership, internal

communication, commitment, resources, and risk awareness – we intend to provide a

framework of the firms' perceptions with respect to the importance of food safety and its

driver and barriers, with a focus on their geographic localization. Italy represents an ideal

setting to explore food safety issues because the agri-food sector is one of the most

important industries in the Italian economy (Italian Coldiretti, 2021) and it is mainly

composed of micro, small and medium-sized firms (Giombini et al., 2021). Moreover, the

Italian economy is characterized by a marked North–South territorial divide (Istat, 2022),

which has led to differences in the development of economic activities over time (for

instance, firms in southern Italy are less productive and innovative with respect to firms

located in the North of the country), for this reason, food safety issues have been studied

based on firms’ geographic localization.

2 Literature background

2.1 Food safety and food safety culture/climate

Food safety as such is defined as “the condition of the foodstuffs in all stages of

production, processing and distribution, required to guarantee protection of consumer's

health, also taking into account normal circumstances of use and information available for

the food- stuffs concerned” (Baert et al., 2011, pp. 941).

The frequent incidence of food scandals associated with food safety failings has

prompted scholars to look closely at the human factors. This has involved shifting the

focus from managerial and technical practices – so important for successful food safety

management – and placing it squarely on the human component. For FS to be effective,

food safety culture and climate have been shown to be vital (Yiannas, 2009; De Boeck et

al. 2015, 2017).

“Food safety culture” and “food safety climate” are often perceived as more or less

synonymous in the literature, but some scholars have attempted a distinction: food safety

culture can be thought of as the big picture within which food safety climate operates.

Food safety climate can be described as the mood resulting from the individual

employees’ assessment of safety conditions within their company. So, it is the function of

food safety culture to promote a broad, generalized context of appreciation of the

importance of creating and maintaining sound beliefs and practices in FS, irrespective of

local and temporal variants (Zohar, 2011).

Griffith et al. (2010a) came up with a definition which acknowledges both the

differences and the areas of overlap between culture and climate: FS culture/climate

encompasses the aggregation of the prevailing, relatively constant, learned, and shared

attitudes, values, and beliefs that contribute to the hygiene behaviours practiced within a

specific food handling environment. Moreover, in their article authors have identified

several aspects or components of FS-culture, such as leadership, internal communication,

commitment, resources, and risk awareness. Leadership is understood as the perception of

the extent to which the organization’s leader(s) are able to involve staff in safety

performance and compliance to meet the organization’s goals/vision concerning FS

issues; communication which is the perception of the extent of transfer or diffusion FS

related information within the firms; commitment is defined as the perception of the

extent of engagement and involvement concerning FS of all parties within the firms;

resources intended as the perception of the extent to which physical and non-physical

means, necessary to operate in food safe way, are present in the firms (e.g. time,

personnel, infrastructure, education/training and procedures); finally, risk awareness,

being the perception of the extent to which the organization is aware of the risks regard

food safety and has these under control.

In their work, De Boeck et al. (2015) adopt the five FS climate components

highlighted by Griffith et al. (2010a) and use them as the basis for a questionnaire, which

they have devised and tested, as a means of assessing the FS climate. They conclude by

appealing for this new FS climate tool to be used more extensively in researches with a

view to supplementing the existing empirical evidence.

2.2 Barriers and drivers towards food safety practices

In recent decades an extensive part of management literature has focused on the

barriers and drivers which influence the adoption of FS preventive practices.

From the literature review, several obstacles are identified to the implementation of

FSMS or standards, particularly in agrifood SMEs (Asioli et al., 2014; Corallo et al.,

2020, Palazzi, Sentuti, 2021). The lack of financial resources and funding represents a

critical factor for minor enterprises (Tomasevic et al., 2013; Escanciano, Santos-Vijande,

2014b; Carmona-Calvo et al., 2016; Rincon-Ballesteros et al., 2019; Palazzi, Sentuti,

2021). Moreover, the so-called “food safety costs” are commonly perceived by

entrepreneurs as too high (Corallo et al., 2020; Casolani et al., 2018; Carmona-Calvo et

al., 2016; Escanciano, Santos-Vijande, 2014a; Mensah and Julien, 2011). Investments in

equipment and new technologies, staff training, consultancy services, maintenance costs,

etc. are some of the expenditures related to the introduction of FSMS. The perception,

“but it’s so expensive”, could be negatively affected by ignorance of the real benefits

stemming from FS systems. In fact, another obstacle is found in the lack of information

and understanding of FS practices, as well as in the scant knowledge of advantages –

economic (i.e. increasing sales, reducing cost of non-compliance) and other (i.e.

improving the firm’s reputation) linked to them (Karaman et al. 2012; Escanciano,

Santos-Vijande 2014a; Mattevi, Jones 2016).

From this viewpoint, numerous studies have mentioned barriers associated to human

factors, placing considerable emphasis, in particular, on the role of top management. Lack

of management motivation regarding the relevance of food safety culture can generate a

half-hearted commitment overall (Escanciano, Santos-Vijande 2014a, b; Macheka et al.,

2013). In this case, the relative lack of interest and scant familiarity with the FSMS and

standards can restrict their adoption, resulting in oversize implementation costs.

Furthermore, the absence of qualified human resources (Karaman et al. 2012) is identified

as a common and significant barrier hindering the implementation of FS practices. These

barriers related to human factors can determine a generalized climate of resistance to

change (Escanciano, Santos-Vijande 2014b) which can both compromise the decision as

to whether to adopt an FS system and the performance obtained through the food safety

systems adopted (Corallo et al., 2020).

Finally, lack of appropriate infrastructure and technological resources (Corallo et al.,

2020) is recognized as an obstacle to the adoption of FS systems. It is often associated

with low investment and little concern for innovation (Karaman et al., 2012).

Scholars have also identified several drivers which encourage FS practices. According

to empirical studies drivers can be categorized on the basis of external and internal factors

(Mattevi and Jones, 2016; Carmona et al., 2016; Corallo et al., 2020).

As regards external drivers, the obligation to comply with regulations is crucial

(Mensah and Julien, 2011; Kirezieva et al., 2015; Corallo et al., 2020). For instance, in

developed countries, governments have implemented specific and detailed regulations to

address safety issues in the food sector (in all phases of production, transformation and

distribution). The existence of these regulatory pressures acts as a powerful stimulus for

firms to adopt FS systems and thereby operate in certain markets. The demands and

expectations of the consumer are another important external factor. In the last few years

consumers have become more sensitive to safety issues (Eurobarometro, 2019; Agnati et

al., 2021). This augmented awareness has an influence on the conduct of firms because it

encourages them to introduce FSMS and standards in order to avoid the risk to consumers

of food-borne diseases (Mensah and Julien, 2011; Karaman et al., 2012; Asioli et al.,

2014). Finally, pressure from the external environment is recognized as an important

driver (Corallo et al., 2020). Specifically, pressures might well be exerted by other

stakeholders belonging to the supply chain: for instance, retailers frequently impose their

own quality and safety standards on suppliers (Fulponi, 2006; Agnati et al., 2021;

Rincon-Ballesteros et al., 2021), constraining them to introduce FS systems.

Internal drivers, on the other hand, usually concern the perceived needs of the firm

(Mattevi and Jones, 2016; Corallo et al., 2020) which in turn derive from the convictions

of the management. The most important drivers are related to the improvement of the

firm’s operations. Among others we can list: improving performance, productivity and

efficiency, reducing the costs and time spent dealing with complaints in the case of a

product hazard (Mensah and Julien, 2011; Karaman et al., 2012; Escanciano and

Santos-Vijande, 2014b; Carmona et al., 2016); increasing sales and competitiveness, also

along the supply chain in which firms operate (Corallo et al., 2020); accessing

international markets where specific conditions obtain in terms of food safety (Casolani et

al., 2018); enhancing the firm’s reputation and legitimacy, meeting consumer expectations

and guaranteeing food quality (Mensah and Julien, 2011; Rincon-Ballesteros et al., 2019).

Moreover, internal drivers would also include the need to demonstrate a sense of social

responsibility and ethical values, such as ensuring the wellbeing of the consumer in

conformity with the firm’s beliefs and culture (Schwartz et al., 2012; Rincon-Ballesteros

et al., 2019).

3 Methodology

A sample of 4614 Italian firms belonging to the sectors of Agriculture,

Manufacturing, and Fishing was extracted from the Atoka database.A questionnaire

(Table 1) was administered by email investigating the firms’ characteristics, the food

safety climate in terms of leadership, commitment, internal communication, resources,

and risk awareness, and the factors able to foster and hinder this orientation, as shown in

table 1. Specifically, the components of FSC are assessed through a 1-to-7 Likert-type

scale (where 1= totally disagree and 7=totally agree) , and it represents the judgment

given by the respondent about the degree of food safety orientation; also barriers and

drivers are assessed through a 1-to-7 (where 1= very little and 7=very much) Likert-type

scale, and it represents the judgment given by the respondent about the influence that

these factors have on hindering or promoting the food safety culture. After the data

collection, a descriptive statistics analysis was performed, and one-way ANOVA was run

to test whether there were differences between FSC, barriers, and drivers depending on

geographic localization.

Table 1: Questionnaire design

Items

Description

Leadership

In your company…

we clearly defined objectives and expected results in terms of food

safety

we encouraged employees to work in compliance with food safety

we listened to employee comments and suggestions about food

safety

we tackled food safety issues constructively and with a view to

continuous improvement

Commitment

In your company…

we considered food safety a matter of great importance

we recognized and rewarded the contributions of those

safeguarding food security

We set a good example by acting quickly to correct food safety

issues

we engaged employees on food safety issues

Internal

communication

In your company…

we communicated regularly with employees/outsourcers about

food safety issues

we communicated clearly and effectively with employees/external

collaborators on food safety issues

employees/external collaborators spoke freely with managers and

with each other about food safety problems and issues

the importance of food safety was highlighted through the

placement of food safety posters, signage, and/or icons

Resources

In your company…

the number of people employed was sufficient to ensure food

safety

employees had adequate infrastructure (for example good

workspace, good equipment) to work in such a way as to ensure

food safety

we had the necessary financial resources to support investments in

food safety (e.g., laboratory analyses, external consultants, extra

cleaning, and equipment purchases)

staff had adequate food safety skills

Risk awareness

In your company…

RA1

food safety risks had been clearly identified

RA2

food safety risks were regularly monitored

RA3

the staff closely monitored potential risks and problems related to

food safety

RA4

staff had adequate knowledge of potential food safety issues and

risks

Barriers

How much do the following barriers hinder the adoption of

practices and tools aimed at improving food safety?

BAR1

Absence of public contributions or difficulty in obtaining them

BAR2

Lack of financial resources (bank loans or own resources)

BAR3

Lack of technologies necessary for the implementation of food

safety

BAR4

Lack of skills, experience, and information

BAR5

Lack of time

Drivers

How much do the following factors favor the adoption of practices

and tools aimed at improving food safety?

DR1

Improvement of corporate image and reputation

DR2

Obligation to comply with the relevant legislation

DR3

Consistency with the values of the top management

DR4

Performance improvement prospects

DR5

Pressure from external subjects (e.g., retailers, consumers,

stakeholders) or internal to the company

DR6

Obtaining public funds

4 Findings

A final dataset of 270 questionnaires was collected, yielding a response rate of 5.8%.

The sampled firms mainly belong to the agriculture, forestry, and fishing sector with 111

organizations (41.11%), followed by 110 enterprises undertaking manufacturing activities

(40.75%). Table 2 shows firms' sector of activities by geographical localization. In

addition, these firms are mainly located in the northern region with 165 organizations

(61.11%), while, in the central and southern regions there are respectively 52 (19.26%)

and 53 (19.63%) firms. Firms' size has been defined in accordance with the EU

recommendation 2003/361. Therefore, the sample is composed of 18 large firms, 77

medium-sized enterprises, 163 small-sized enterprises, and by 12 micro-enterprises.

Moreover, the businesses that took part in the study had a range of employee sizes: 4%

had up to 9 employees, 73% had between 10 and 49, 21% had between 50 and 249, while

the remaining 2% had more than 250 employees. Table 3 shows the geographical

distribution of firms by size. Based on the end market, almost half of the enterprises

(51.48%) operate internationally, 27.03% run their activities only on the national territory,

while 21.48% make business within Europe. Table 4 shows the end market of firms by

geographical localization.

Table 2: Sector of activities by geographical localization

Sector of activities

North

Centre

South

A) Agriculture, forestry, and fishing

41.11

B) Extraction of minerals from quarries and

mines

0.37

C) Manufacturing activities

40.75

E) Water supply; sewerage, waste

management and remediation activities

0.37

G) Wholesale and retail trade; repair of

motor vehicles and motorcycles

7.77

I) Accommodation and catering service

activities

2.59

M) Professional, scientific, and technical

activities

0.37

S) Other service activities

6.30

U) Extraterritorial organizations and bodies

0.37

61.11

19.26

19.63

100

Table 3: Geographical distribution of firms by size

Size

North

Centre

South

Large

6.66

Medium

28.53

Small

60.37

Micro

4.44

61.11

19.26

19.63

100

Table 4: End market of firms by geographical localization

End market

North

Centre

South

National

27.04

21.48

International

51.48

61.11

19.26

19.63

100

Regarding the respondent's characteristics, we find out the following information. The

questionnaire has been filled out by 139 women (51.48%) and by 131 men (48.52%). On

average, men result to have 22 years of experience in the industry, while women have 16

years. Based on educational level, about half of the respondents (51.85%) had a

bachelor’s or master’s degree, 34.81% declared that they had a high school diploma,

2.59% attended a middle school, and finally, only 10.74% had postgraduate training.

Table 5 shows respondents' educational background by gender.

Table 5: Educational background by gender

Educational background

Women

Men

High school diploma

34.81

Postgraduate training

10.74

Bachelor’s or master’s degree

51.86

Middle school

2.59

51.48

48.52

100

Table 6 shows the descriptive statistics for food safety climate by the firms’

geographic localization. Through the one-way analysis of variance (ANOVA), we

discovered that, when it comes to food security climate, geographic localization matter.

The importance of food safety (item C1) seems significantly different between firms

located in the center (mean=6.62, p=0.002) and in the north (mean=6.28, p=0.002).

Therefore, the importance to guarantee food safety to consumers seems, on average, to be

more perceived by firms located in the center, than by firms located in the north.

Moreover, the territorial position seems to matter also when it comes to risk awareness on

food security. Specifically, the attention to the clear identification of food safety risks

(item RA1), seems significantly different between enterprises located in the center

(mean=6.48, p=0.04) and in the north (mean=6.11, p=0.04); the periodicity of risk

monitor (item RA2), seems significantly different between firms located in the center

(mean=6.52, p=0.03) and in the north (mean=6.13, p=0.03); and, the employment of

human resources with better knowledge of potential food safety issues and risks (item

RA4) seems significantly different between enterprises located in the center (mean=6.23;

p=0.00) and in the north (mean=5.75, p=0.00). Therefore, firms located in the center

compared to those located in the north, seem to consider factors such as risk

identification, monitoring, and the owner of adequate knowledge to face risks more

strategically.

Table 6: Food safety climate by geographic localization

North

Centre

South

Ite

Mean

St.

dev

Min

Max

Mean

St.

dev

Min

Max

Mean

St.

dev

Min

Max

5.84

1.32

5.90

1.418

5.98

1.39

6.12

1.11

6.40

0.774

6.38

0.90

5.82

1.30

5.94

1.211

5.98

1.29

6.12

1.11

6.21

0.936

6.21

1.03

6.28

1.07

6.62

0.661

6.49

0.75

5.15

1.67

5.35

1.714

5.49

1.54

6.15

1.14

6.46

0.753

6.28

0.95

5.84

1.37

6.27

1.050

6.06

1.22

5.68

1.34

6.06

1.145

5.92

1.31

5.67

1.37

6.12

1.114

5.83

1.35

5.67

1.37

5.88

1.096

5.64

1.44

5.27

1.62

5.73

1.443

5.66

1.53

5.69

1.35

6.12

1.078

5.60

1.47

5.90

1.27

6.33

0.923

5.92

1.07

5.87

1.34

6.12

1.022

5.66

1.37

5.68

1.25

6.06

0.938

5.83

1.07

6.11

1.14

6.48

0.779

6.19

0.94

6.13

1.15

6.52

0.727

6.09

1.20

5.88

1.21

6.31

0.981

5.81

1.33

5.75

1.32

6.23

0.962

5.89

1.17

Table 7 shows the descriptive statistics for drivers and barriers able to promote or

hinder food safety. Through the one-way analysis of variance (ANOVA), we discovered

that, when it comes to drivers and barriers, geographic localization matter. Focusing on

the drivers, the fact that food safety is consistent with the values of top management (item

DR3) seems significantly different between enterprises located in the center (mean=6.21,

p=0.00) and in the north (mean=5.70, p=0.00). Also, the prospect of improving

performance (item DR4) seems significantly different between firms located in the center

(mean=6.23, p=0.00) and in the north (mean=5.55, p=0.00). Therefore, drivers such as the

alignment between entrepreneurial values and beliefs with food safety principles and the

importance of increasing performance seem, on average, more influencing for firms

located in the center than in the north. Regarding barriers, the lack financial resources

(item BAR2) seems significantly different between companies located in the south

(mean=3.96, p=0.02) and in the north (mean=3.30, p=0.02). Thus, for enterprises located

in the south, the difficulty to access or collect financial resources represent a greater

obstacle to meeting food safety than for firms in the north.

Table 7: Barriers and drivers by geographic localization

North

Centre

South

Items

Mean

St. dev

Max

Mean

St. dev

Max

Mean

St. dev

Max

BAR1

3.68

2.01

4.13

1.87

4.13

1.80

BAR2

3.30

1.89

3.35

1.80

3.96

1.64

BAR3

3.18

1.72

3.17

1.79

3.75

1.66

BAR4

3.05

1.76

2.96

1.81

3.57

1.72

BAR5

3.62

1.91

3.19

1.65

3.66

1.83

DR1

5.45

1.50

5.90

1.24

5.66

1.24

DR2

6.07

1.26

6.31

1.14

6.23

0.87

DR3

5.70

1.40

6.21

1.09

5.96

1.18

DR4

5.55

1.44

6.23

0.94

5.83

1.10

DR5

5.22

1.49

5.52

1.46

5.23

1.50

DR6

3.08

1.83

3.27

1.71

3.74

1.80

5 Discussion and conclusion

This study aims to explore food safety in Italian agri-food firms by providing a

framework of perceptions with respect to the importance of food safety and its driver and

barriers, with a focus on their geographic localization.

Data showed that the main differences concerning the food safety approach regard

firms located in the center with those located in the north. Specifically, these differences

concern the level of commitment and risk-taking awareness. Enterprises located in the

center seem to have integrated food safety into organizational culture and planning

activities more than those located in the north. These results suggest that for firms located

in the center, food safety is a key objective to be pursued as much as the economic one.

The relevance of this topic is also testified by the fact that these firms put great attention

on what concern the identification and monitoring of risk-food safety related. This risk

awareness means that firms, to guarantee food safety, are more inclined to consider all

aspects of the food chain as interrelated processes, starting from primary production to the

sale or delivery of food to the consumer. This approach facilitates risk assessment,

management, and communication. Therefore, firms located in the center seem to adopt a

strategic and systematic approach to defining measures, and interventions to protect

consumers' health, in a way effective, proportionate, and targeted. For these firms, the

human dimension plays an important role in food safety. These results suggest that for

these enterprises training activities and a shared and broadened culture at every level are

pivotal to implementing strategies devoted to increasing food safety. Thus, the set of

attitudes, values, and beliefs on food safety shared by the entrepreneur can be considered

an important driver to promote the commitment and robustness of an organization's food

safety management. Data also suggested that a proactive approach to food safety is

pushed by what firms expect to obtain in return: and for firms located in the center, the

prospect of improving their performance is fundamental to planning activities focusing on

food safety.

Data showed lack of financial resources represents a barrier to the achievement of

food safety, especially for organizations located in the south.

The main implications are the following. From a scholarly standpoint, this study

makes two main contributions to the extant literature regarding food security, especially

in the Italian context. First, it provides a framework for how Italian firms, especially

SMEs, manage leadership, commitment, internal communication, resources, and risk

awareness to feed the food security climate. The framework's identification could increase

entrepreneurs' and managers’ awareness of their key role in the spread of an

organizational culture able to set up paths focusing on food safety and on its contribution

to the firm’s value-creation mechanism. Second, this work attempts to provide a deep

understanding of the drivers and barriers that respectively push the firms or disincentivize

them from implementing food safety practices. This could incentive enterprises to plan

what they expect from food safety as well as undertake activities to overcome issues

related to its implementation. As for practical contributions, the empirical results suggest

that firms located in the south should be involved in training projects devoted to

increasing knowledge of food safety practices and systems, and governments should

support this learning process through specific public funds. Moreover, all firms,

regardless of their geographic localization, should promote a holistic and integrated

approach to food safety, from the firm's boundaries to the supply chain.

Two main limitations can be mentioned and may offer avenues for future research.

The main limitation is related to the restricted sample size, which means that the

generalizability of the results is limited to developing contexts in which the data were

collected. Therefore, the study should be replicated across other European countries.

Second, this study, as explorative, employed only a descriptive statistical analysis.

Therefore, further research could improve the analysis by exploring, for example by

ordinary least squares regression (OLS), what components of barriers and drivers can

positively or negatively affect the achievement of food safety.

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Food safety and Innovation in Italian Agri-Food

Enterprises

Mara Del Baldo

University of Urbino Carlo Bo

Department of Economics, Society & Politics

Via Saffi, 42 – Urbino (Italy)

E-mail: mara.delbaldo@uniurb.it

* Corresponding author

Massimo Ciambotti

University of Urbino Carlo Bo

Department of Economics, Society & Politics

Via Saffi, 42 – Urbino (Italy)

E-mail: massimo.ciambotti@uniurb.it

Daniele Giampaoli

University of Urbino Carlo Bo

Department of Economics, Society & Politics

Via Saffi, 42 – Urbino (Italy)

E-mail: daniele.giampaoli@uniurb.it

Annalisa Sentuti

University of Urbino Carlo Bo

Department of Economics, Society & Politics

Via Saffi, 42 – Urbino (Italy)

E-mail: annalisa.sentuti@uniurb.it

Abstract

Due to the recent pandemic linked to the Sars Cov-2 and the future challenges linked

to climate change emergency, globalization and the war in Ukraine the global Agrifood

system has suddenly become the protagonist of the political debate and has entered the

agenda of all Governments. A key issue for scholars and entrepreneurs is to understand

how to boost innovation in the Agri-food sector. Therefore, this paper investigates the

impact that each food safety climate component (leadership, internal communication,

resources and risk awareness) has on innovation performance. Data were collected from

168 Italian firms operating in the agri-food industry from March to May 2022 through an

online questionnaire. Results show that only leadership has a direct significative impact

on innovation performance and suggest that food safety climate, even if it is formed by

several components, has to be conceptualized and analyzed as a whole. This study is the

first one that analyses the impact of food safety component on innovation performance in

the context of Italian firms and is part of an interdisciplinary research project funded by

Urbino University focused on food safety in Italian Agri-food firms. The main limitation

of the present study is that we collected data from a single European Country and results

cannot be generalized.

Keywords – food safety, food quality, food safety climate, innovation, Agri-Food

Enterprises

Paper type – Academic Research Paper

1 Introduction

The 2020 pandemic linked to the Sars Cov-2, probably starting from a small wet

market in China, in a few months, cornered the whole humanity, highlighting the

problems related to global interconnection. Western countries have taken full awareness

of the link between the production, processing and consumption of food for and the

spread of possible pathogens (Santa Chiara Lab, 2020). In such a context, the global

Agri-food system has suddenly become the protagonist of the political debate and has

entered the agenda of all Governments (Palazzi and Sentuti, 2021).

Agri-food is defined as the combination of the primary sector and the food industry

(European Commission, 2007). As well known, this sector has been faced with countless

challenges in the past (e.g., geo-political tension and food crises (FAO, 2020) and the

years to come will not be outdone due to the climate change emergency, globalization and

the recent war in Ukraine. The growing attention paid by different stakeholders

(governments, NGOs, community, etc.) to sustainability, climate changes, etc., have

forced firms to revise their business models (Del Baldo, 2022) and adopt strategies

focused on food safety and food quality (Merola, 2015). In fact, consumers today express

very specific needs and demand more guarantees than in the past (Ajzen et al., 2007;

Boccia and Sarnacchiaro, 2015).

In the European Union Agri-food is one of the most important sectors in terms of

economic output and employment (Food Drink Europe, 2020) and is mainly composed of

SMEs (Cesaroni et al., 2021). Its importance has also been underlined by the European

Green Deal and the Farm to Fork (F2F) strategy, which aim to guide the transition

towards a fair, healthy, and respectful food system for people and the environment.

Moreover, the European partnership for research and innovation in the Mediterranean

area (PRIMA, 2018) sees for the first time a research programme dedicated specifically to

the Mediterranean, with concrete repercussions on an essential sector such as agri-food.

PRIMA’s main goal is “to devise new research and innovation approaches to improve

water availability and sustainable agriculture production in a region heavily distressed by

climate change, urbanisation and population growth”.

For the Italian economy, perhaps even more than in other countries, the primary sector

plays a leading role (Boccia, 2015). Indeed, the Italian agriculture does not occur only as

an economic activity, but as a real way of life, a tradition, a cultural identity. The

tradition, whose continuity is ensured using raw materials of excellent quality, is

increasingly supported by innovation, which provides instruments such as the fact

traceability, by which we can reconstruct the history of the product and meet the needs

guarantee consumer (Zouaghi and Sanchez, 2016). Therefore, for Italian firms operating

in the agri-food sector, food safety and quality became fundamental assets to develop

through both technological and organizational innovation. Producers, processors,

distributors and operators of the agrifood sector are called to adopt new practices in line

with the new requirements of food security regarding nutritional content, absence of

pathogens and contaminations, treatment of animals and reduced impact on the

environment.

Consequently, a key issue for scholars and entrepreneurs is to understand how to boost

innovation in the Agri-food sector. In particular, as empirical evidence is still limited, our

goal is to investigate if a food safety climate within firms enhances or hinders innovation.

By adopting the perspective of Griffith et al. (2010) we analyzed the impact that

each food safety climate component (leadership, internal communication, resources and

risk awareness) has on innovation performance. Results show that only leadership has a

direct significative impact on innovation performance confirming the assumption of De

Boeck et al. (2015) according to whom food safety climate components has to be

considered has a whole in order to be effective.

2 Literature Review

The growing attention paid by governments, NGOs and the civil community to food

safety and quality (Hartmann, 2011; FAO, 2020) agrifood companies have begun to adopt

food safety management systems (FSMS) (De Boeck et al., 2017). Food quality is defined

as “a complex and multidimensional concept which is influenced by a wide range of

situational and contextual factors”, among others: safety, origin, nutrition, sensorial

properties, authenticity and convenience (Knowledge Centre for Food Fraud and Quality,

2021). A food “quality” must fully satisfy the customer, which now is interested also

interested in ethical values (Covino, 2014). Food safety has been defined as “the

condition of the foodstuffs in all stages of production, processing and distribution,

required to guarantee protection of consumer's health, also taking into account normal

circumstances of use and information available for the food stuffs concerned” (Baert et

al., 2011). As claimed by Casella (2001) food safety is an inherent part of food quality.

From this perspective a food can be considered safe if it is the result of a combination of

primary resources, healthy and controlled, with no risk to consumer health.

Recent events of consumer food poisoning and outbreaks (European Parliament, 2019;

Griffith, 2006) have shown that FSMS per se are not sufficient to guarantee food safety as

most of the accidents were due to food handler errors and/or non-adherence to food

hygiene or safety procedures (Powell et al., 2011; Wright et al., 2012). This drove several

scholars to shift their attention from FSMS to human-centric aspect of food safety, and

concepts like food safety culture and food safety climate begun to emerge (Powell et al.,

2011; Taylor, 2011; Yiannas, 2009).

While food safety climate is considered as “the employees' perception of the situation

within an organization (vide infra), a ‘snapshot’ that reﬂects important aspects of an

organization's safety culture”, food safety culture is “the bigger framework, of which food

safety climate is a component” (De Boeck et al., 2015). More in detail they conceptualize

food safety climate through several variables that only taken together produce the desired

outcomes (a climate of food safety) (De Boeck et al., 2015). However, there is still a lack

of empirical research on this topic and the role played by each food safety climate’s

component is still not clear. This reason led us to investigate if and how each food safety

component enhances or hinder a firm’s ability to innovate.

According to Griffith et al. (2010) food safety climate includes four main components:

leadership, internal communication, resources and risk awareness. Leadership is the

ability to engage people in hygiene and safety procedures and meet the organization's

goals, vision, and food safety and hygiene requirements (Griffith et al. 2010). Leaders

should set food safety and hygiene goals and urge staff to follow them as an

organization's culture starts at the top and trickles down. Leaders should also consider

employees' feedback regarding hygiene and food safety, as employees are more engaged

and driven when their perspectives are recognised and respected (Yiannas, 2009).

In agri-food businesses, innovative performance is heavily influenced by the quality of

the leadership at the helm. Leaders who inspire curiosity and experimentation, encourage

lifelong learning, and promote teamwork can do wonders for the spread of novel concepts

and methods (Amabile et al., 2004; Mumford et al., 2002). Leaders can affect innovative

performance by providing a compelling vision and reasonable targets that motivate

workers to think outside the box and develop unique approaches to achieving the

organization's goals (Zhang and Bartol, 2010). Leaders can encourage employees to freely

share their ideas and try new things (Amabile et al., 2004). Transformative leaders can

boost their teams' creative potential by giving their employees a voice and helping them

grow professionally (Gumusluoglu and Ilsev, 2009). Leaders can foster an innovative

culture by promoting the free flow of information and ideas within the company (Carmeli

et al., 2013). Effective leadership in the agri-food industry can have a significant impact

on innovative performance by encouraging a culture of creativity and collaboration,

establishing tangible company goals and facilitating two-way communication at all levels.

Therefore, we hypothesized that:

H1: Leadership (LEAD) has a positive direct impact on innovation (INNP);

Hygiene and food safety information has to be shared through organization. Leaders

should regularly remind staff about cleanliness and food safety to ensure they understand

their duties and responsibilities. Leaders should use clear, education-appropriate

language. Food handlers (operators) should also be able to talk to their leaders about

hygiene and food safety. Organizational openness may improve food safety (Griffith et

al., 2010). Employees are more inclined to believe in hygiene and food safety if reminded

often and consequently, posters, signs, and other items should stress hygiene and food

safety (Yiannas, 2009).

When it comes to innovation performance internal communication is crucial. The

spread of information, expertise, and ideas within an organisation is greatly aided by

strong lines of communication, creating a setting in which collaboration and new ideas

may flourish (Carmeli et al., 2013). Employees are more inclined to participate in

innovative activities and provide novel ideas when they know they may voice their

thoughts and opinions without fear of retaliation. The creative activities of a company

might be better coordinated and aligned thanks to effective internal communication

(Cabrera et al., 2006; Giampaoli et al., 2021). Employees will be better able to understand

their position in the innovation process and work collaboratively to accomplish the

intended outcomes if the company's goals, values, and expectations surrounding

innovation are properly communicated (Cabrera et al., 2006). Finally, recognising and

celebrating creative successes through internal communication reinforces and motivates

staff to keep up their innovative work (Zhang and Bartol, 2010). Knowledge exchange,

alignment and coordination of innovation activities, and recognition and celebration of

inventive successes are all aided by strong internal communication, which is vital for

improving innovative performance. Therefore, we hypothesized that:

H2: Internal communication (COMINT) has a positive direct impact on innovation

(INNP);

Resources include time, personnel, infrastructure, and education or training. When an

organisation has enough and trained employees, each team member has ample time to

work hygienically and safely. Support may motivate hygiene and food safety (Griffith et

al., 2010). When employees aren't under pressure, their work may be better. Hygiene and

food safety infrastructure and enough funding show organisational support. An essential

resource affecting the effectiveness of innovation is human capital, notably the skills,

knowledge, and expertise of employees (Osterwalder and Pigneur, 2010). Businesses with

competent and diversified workforces may provide a wider range of innovative ideas and

solutions, which eventually results in higher levels of innovation (Laursen and Foss,

2003). Innovative performance is heavily influenced by technological capabilities,

particularly the organization's capacity to create, adopt, and adapt new technologies (Liu

et al., 2021; Paoloni et al., 2022). The culture, procedures, and systems of an organisation

make up its organisational infrastructure, which may help or inhibit innovation

(Giampaoli et al., 2021). Therefore, we hypothesized that:

H3: Resources (RES) have a positive direct impact on innovation (INNP);

Risk awareness concerns the organization's understanding of hygiene and food safety

issues and capacity to handle them (Griffith et al., 2010). Risk perception is essential to

food safety (Griffith et al., 2010). Risks should be known to employees so they can

consider them into their daily work decisions. When employees trust the food safety

management system, they feel less stressed, and the company is functioning well. This

trust might inspire them to maintain hygiene and food safety (Zhu and Akhtar, 2014). At

the same time, overconfidence might lead to underestimating food safety issues (Griffith

et al., 2010). To identify risks and respond correctly, executives and workers must be

risk-aware (Griffith et al., 2010). Leaders who exaggerate hygiene and food safety issues

may deter workers from working in a hygienical and safe way. A higher degree of risk

awareness enables firms to see and evaluate prospective possibilities and dangers,

empowering them to make innovation project decisions. Lendowski et al. (2022) found

that higher level of risk management lead to an increased innovation intensity. Therefore,

we hypothesized that:

H4: Risk awareness (RISK) has a positive direct impact on innovation (INNP).

3 Methodology

The population of Italian companies working in the agri-food industry was extracted

from the Atoka database, including firms from the sectors of Agriculture, Manufacturing

and Fishing. A total of 4614 companies were identified, of which 3178 had no

certifications and 1437 had certifications. Two questionnaires were utilized to gather

survey information, with the first directed to the entire population of companies, and the

second focused on certain aspects of companies with certifications. The survey ran from

March to May 2022, and a total of 168 companies—approximately 14% of the 3178 firms

from the ATOKA database—participated. The businesses that took part in the study had a

range of employee sizes: 4% had up to 9 employees, 73% had between 10 and 49, 21%

had between 50 and 249, while the remaining 2% had more than 250 employees. The

Food Safety Climate scales adopted for the study were taken from De Boeck et al. (2015),

while the innovation performance scale was taken from Kianto et al. (2017).

4Results

To test our hypotheses, we created and empirically tested a structural model using

PLS-SEM following the procedure of Hair et al. (2017). PLS-SEM is a variance-based

structural equation modelling method suitable for exploratory research (Benitez et al.,

2020). Moreover, PLS is the most appropriate technique when the data's nature (common

factor or composite) is unknown, as it produces less estimation bias compared to

covariance-based SEM. Measurement model was tested through reliability, convergent

and discriminant validity of the scales (Hair et al, 2017). Results are shown in Table 1 and

Table 2. No items were dropped because all the factor loading are above the

recommended threshold. To assess the statistical significance of the structural model we

employed a bootstrap algorithm (Hair et al., 2017). Both measurement and structural

model show good parameters and are suitable for our purpose.

Table 1: Reliability and convergent validity

Reliability and convergent validity

Inherent variables

Items

Loadings

Cronbach's

alpha

Dillon-Goldstein

rho

AVE

COMINT

0.909

0.919

0.789

COMINT1

0.948

COMINT2

0.949

COMINT3

0.858

COMINT4

0.788

INNP

0.892

0.904

0.755

INNP1

0.877

INNP2

0.902

INNP3

0.806

INNP4

0.888

LEAD

0.893

0.915

0.757

LEAD1

0.798

LEAD2

0.893

LEAD3

0.890

LEAD4

0.893

RES

0.891

0.914

0.752

RES1

0.838

RES2

0.887

RES3

0.870

RES4

0.874

RISK

0.958

0.964

0.888

RISK1

0.936

RISK2

0.953

RISK3

0.943

RISK4

0.938

Table 2: Discriminant validity

Fornell-Larcker

COMINT

INNP

LEAD

RES

RISK

COMINT

0.888

INNP

0.435

0.869

LEAD

0.824

0.436

0.870

RES

0.750

0.381

0.776

0.867

RISK

0.799

0.348

0.831

0.819

0.942

We found good parameter for innovation (R2=0.219) but only leadership has a

significant direct impact (β=0.295, p=0.045) on the latter. Results are shown in Figure 1

and Table 3:

H.1 LEAD -> INNP: evidence support H1 (β=0.295, p=0.045) confirming that

Leadership (LEAD) has a positive direct impact on innovation (INNP).

H.2 COMINT -> INNP: evidence does not support H2 as internal communication has

not a significative impact on a firm’s ability to innovate.

H.3 RESOURCES -> INNP: evidence does not support H3 as resources per se have

not a significative impact on a firm’s ability to innovate.

H.4 RISK -> INNP: evidence does not support H4 as risk awareness has not a

significative impact on a firm’s ability to innovate.

Figure 1: Results of the structural model

Table 3: Results of hypothesis testing

Hypothesis

Path

Coefficient

t-value

p-value

Status

LEAD -> INNP

0.295

2.001

0.045

Supported

COMINT -> INNP

0.272

1.857

0.063

Not supported

RES -> INNP

0.130

0.797

0.425

Not supported

RISK -> INNP

-0.221

1.255

0.210

Not supported

5 Discussion and conclusion

Results confirm that innovative performance in agri-food companies depends on

leadership. Leaders who stimulate curiosity, experimentation, lifelong learning, and

cooperation may disseminate new ideas and methodologies (Amabile et al., 2004;

Mumford et al., 2002). Leaders may inspire innovation by setting clear goals and a

compelling vision (Zhang and Bartol, 2010), providing a secure area for employees to

express their ideas and try new things to inspire creativity (Amabile et al., 2004). Leaders

may support innovation by encouraging knowledge and idea sharing inside the firm

(Carmeli et al., 2013). By fostering creativity and cooperation, setting clear corporate

goals, and promoting two-way communication, agri-food executives can boost

innovation.

Contrary to what was assumed, internal communication has no significant impact on

innovation performance. The findings seem to contradict theoretical and empirical studies

showing that knowledge sharing stimulates innovation (Giampaoli et al., 2021). However,

we must underline that our focus was on the internal communication of food security

information and not knowledge-sharing per se. This may partly explain the results.

Also, the availability of resources (financial, infrastructure and human capital) does

not appear to have an impact on innovation performance. These findings are partly in line

with studies where human capital is the only component of intellectual capital that does

not facilitate innovation. It should be added that Italian agricultural enterprises are often

small and family-run, and therefore may have difficulty in accessing the resources needed

to innovate. The funding allocated to support innovation in the agricultural sector through

the PNRR (2021) is therefore an opportunity that is necessary to harness to modernise the

Agri-food sector.

Finally, risk awareness also does not appear to facilitate innovation. Probably, if this

on the one hand helps to establish a food safety climate and operate safely, on its own,

awareness of food security risks does not seem to be enough to stimulate creativity and

innovation. As Amabile (1988) argues, in order to find creative solutions, three basic

ingredients are needed: creativity, knowledge and motivation. It is therefore necessary to

actively engage all the staff of the organization and motivate them to food safety

objectives.

Having found that only leadership has a significant direct impact on innovation,

empirical evidence seems to support the assumption of De Boeck et al. (2015) according

to whom food safety climate is formed by several variables that only taken together

produce the desired outcomes. However, it is important to understand the dynamics

among food safety components to understand better if and how they enhance each other.

In conclusion our work contributes to food safety literature by analyzing the impact of

each food safety climate components on innovation performance in the Italian agri-food

sector. We offer valuable insights that can help agri-food firms to understand food safety

and its implications better. As said before, in the future innovation will have a key role in

addressing challenges and transforming the Agri-food sector to be ready to respond to the

new needs of an increasingly interconnected population, now conscious of the

implications that food has on health, environment and the whole society. The main

limitation of this paper is that data were collected from Italian firms and results cannot be

generalized.

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The circular economy in the restaurant sector. The

qualitative multiple case study of piadinerias in

Pesaro

Federica Murmura

Department of Economics, Society, Politics

University of Urbino Carlo Bo

Via A. Saffi, 42 - 61029 Urbino (PU) - Italy

E-mail: federica.murmura@uniurb.it

Elisabetta Savelli

Department of Economics, Society, Politics

University of Urbino Carlo Bo

Via A. Saffi, 42 - 61029 Urbino (PU) - Italy

E-mail: elisabetta.savelli@uniurb.it

Giada Pierli

PhD Student in Global Studies. Economy, Society and Law

University of Urbino Carlo Bo

Via A. Saffi, 42 - 61029 Urbino (PU) - Italy

E-mail: g.pierli@campus.uniurb.it

Valentina Vedovi

Department of Economics, Society, Politics

University of Urbino Carlo Bo

Via A. Saffi, 42 - 61029 Urbino (PU) - Italy

E-mail: v.vedovi@campus.uniurb.it

Abstract

Objectives: This study seeks to investigate and understand the current degree of

diffusion and application of circular economy practices in small and medium-sized

enterprises (SMEs) in the Marche region engaged in the piadineria service, highlighting

the limits and benefits of implementation.

Literature review/Theoretical Framework: The circular economic model is

increasingly gaining the attention of the academic, professional, and institutional world

(Zhang et al., 2022). In this framework, the restaurant sector, among others, emerges,

whose environmental impact appears to be highly significant (Camilleri, 2021). Several

scholars state that this sector largely contributes to climate change, generating pollution,

wasting energy and using plastic and other harmful detergents and chemicals (Milindi et

al., 2022). Moreover, the restaurant industry is a huge generator of food waste and other

resources, resulting in greenhouse gas (GHG) pollution, wasted materials and huge

investment costs (Kim et al., 2020).

Approach/Method: A qualitative multi-case study was conducted, as this is one of the

most widely used instruments for carrying out qualitative research. To this end, a

structured questionnaire consisting of 43 questions divided into four main sections was

created and administered in interviews to seven food establishments offering piadineria

service and located in the city of Pesaro.

Main Results: The choices and actions taken by SMEs in the restaurant sector appear

to vary according to their different sustainability orientations and are strongly dependent

on economic and financial determinants. The food service establishments under

investigation have just taken the first steps towards the goal of a fully sustainable

operational approach, much still needs to be done for circular economy practices to

become an integral part of the way of thinking and managing internal activities and

processes.

Value and Implications for Theory and Practice: This study contributes to enriching

the literature on the circular economy applied to the restaurant sector by offering an

overview of the current degree of implementation and diffusion of sustainable practices

within SMEs. Furthermore, managers and practitioners could use the developed

framework as a tool to assess their current level of maturity in terms of circular economy.

Similarly, politicians could become aware of the need to introduce measures to promote

environmentally friendly investments, which could address the typical difficulties of

SMEs in the sector.

Keywords – Circular economy, Food service sector, Sustainability, Circular restaurant,

SMEs.

Paper type – Practical Paper

1 Introduction

The current historical period is characterised by the pressing issues of the climate

crisis and the depletion of the planet's available resources, while the world's population

numbers are increasing year by year. Nowadays, almost one third of global greenhouse

gas (GHG) emissions come from food systems, which require large amounts of resources

to run, thus compromising the biodiversity of natural environments (Camilleri, 2021). For

a long time, and even more today, the food sector has been facing challenges such as food

loss and waste, food safety, supply chain traceability, product quality and environmental

degradation (Al-Obadi et al., 2022). In this regard, restaurants and related production and

consumption practices play a not insignificant role. Several scholars state that this sector

largely contributes to climate change, generating pollution, wasting energy, and using

plastic and other harmful detergents and chemicals (Milindi et al., 2022). In addition to

this, the restaurant industry is a huge generator of food waste and other resources,

resulting in greenhouse gas pollution, wasted materials and huge investment costs (Kim et

al., 2020). In this framework, the linear economic model, based on the perpetuation of the

“extract-produce-use-throw away” mechanism, represents an outdated paradigm (Greer et

al., 2020) that risks seriously compromising the chances of survival and well-being of

future generations. To cope with these difficulties and prevent them from turning into

irreversible consequences, a change of path is therefore imperative, which requires the

adoption and introduction of a new economic paradigm, namely the circular one. The

analysis of opportunities and barriers to increasing the environmental performance of the

food service industry through the implementation of circular business models has thus

gained much attention within the academic, managerial, and institutional debate (Zhang et

al., 2022). However, most studies and interventions focus on issues related to food waste

and healthiness (Greer et al., 2020). Similarly, Dani et al. (2021) point out the scarcity of

empirical evidence on the topic of food ethics and sustainable restaurant practices,

compared to more exploratory interest on different circular economy (CE) approaches

applied to businesses in other sectors (Kirchherr and van Santen, 2019). Furthermore,

circular models appear predominantly examined with reference to large companies

(Walker et al., 2021), although small and medium-sized enterprises represent a substantial

part of the restaurant sector (Iraldo et al., 2017).

To fill these gaps, this study aims to investigate and understand the current degree of

diffusion and application of circular economy practices within the Italian restaurant

industry and, more specifically, within the small and medium-sized food establishments in

the Marche region that provide piadineria service. Therefore, a qualitative multiple case

study was carried out involving seven piadinerias in Pesaro - an important urban centre in

the Marche region in terms of gastronomic culture and culinary experiences - investigated

by using a structured interview. In particular, the following research questions were

addressed: (i) How much importance is given to the implementation of CE practices

within the restaurant sector, especially by the piadinerias in the city of Pesaro? (ii) What

is the current degree of progress with respect to the implementation of circular practices

and which of these do the premises under investigation prefer to adopt? (iii) What are the

advantages and limitations related to the implementation of CE practices encountered by

the interviewees? (iv) What kind of incentive(s) to support the implementation of these

practices do the interviewees need?

The paper is organised in three sections. Section 1 presents a review of the literature

on the circular economy in the restaurant sector. In Section 2, the research methodology

used, and the results of the study are described. Finally, Section 3 presents the main

conclusions, contributions of the analysis conducted, limitations and future research

directions.

2 Literature Review

The concept of Circular Economy (CE) has been declined over time in a multifaceted

way (Yuan et al., 2006; Lieder and Rashid, 2016; De Angelis, 2021), assuming multiple

meanings depending on the context and its economic, socio-cultural, and

political-institutional change. In the face of an ever-evolving body of scientific

knowledge, many studies relate and reduce the concept of CE mainly to issues concerning

the efficient use of materials and natural resources, mostly dealing with purely notional

and regulatory aspects (Alhawari et al., 2021). Nevertheless, de Leonardis (2019, p.7)

emphasises that the circular economy is "a concept with revolutionary potential", which

implies the adoption of a radically new perspective on issues that are not only

environmental, but also socio-economic and related to both production and consumption

systems of goods and services. Therefore, it is necessary to investigate CE also from a

more operational point of view, as a tool that would allow the concept of sustainable

development to be implemented systematically and effectively (Ghisellini et al., 2016;

Murray et al., 2017) within different business activities. To this end, it is needed to draw

up an operational definition of CE, which possesses clear and measurable characteristics

capable of creating a common language among scholars and practitioners (Alhawari et al.,

2021), with consequent effects on the practices to be performed towards a sustainable

transition. In this perspective, particularly comprehensive appears to be the formulation of

Kirchherr et al. (2017, pp. 224-225), according to which the circular economy may be

understood as “an economic system that is based on business models which replace the

‘end-of-life’ concept with reducing, alternatively reusing, recycling and recovering

materials in production/distribution and consumption processes, thus operating at the

micro level (products, companies, consumers), meso level (eco-industrial parks) and

macro level (city, region, nation and beyond), with the aim to accomplish sustainable

development, which implies creating environmental quality, economic prosperity and

social equity, to the benefit of current and future generations”.

Over the last few years, the circular economic model is increasingly gaining the

attention of the academic, professional, and institutional world (Zhang et al., 2022), both

in terms of the conceptualisation of its theoretical paradigm and the complex practical

implementation of its fundamental principles. In this framework, the restaurant sector

emerges, among others, whose extensive and varied business and the plurality of actors

involved in it contribute to making its environmental and social impact highly significant

(Kim and Hall., 2020; Camilleri, 2021). Several scholars state that this industry largely

contributes to climate change, generating pollution, wasting energy and using plastic and

other harmful detergents and chemicals (Milindi et al., 2022).

Restaurants can be quick-service restaurants (QSR, or more commonly known as fast

food), they can be themed, multi-cuisine, or simple cafés. Regardless of their

classification, every restaurant is structured into three main departments (Dani et al.,

2021): the first is production, in which purchased raw materials are combined, cooked and

transformed into attractive and appetising dishes; the second relates to the activity of

serving food and beverages to customers; the third concerns cleaning and maintaining the

hygiene of all the spaces in the restaurant. To perform this complex set of complementary

activities in the best and most coordinated way, each restaurant must possess a wide range

of equipment made of different materials, from plastic and wood to metals such as iron,

stainless steel and aluminium, while the equipment, especially those located inside the

kitchen, run on electricity, coal, gas and water (Dani et al., 2021). Hence, the restaurant

business primarily involves a high and sometimes careless consumption of conventional

resources, which results in the release of large amounts of highly polluting carbon

emissions into the environment (Liu et al., 2022); in addition, the restaurant industry can

be qualified as a huge generator of food waste, which results in material waste and high

investment costs (Kim et al., 2020). Specifically, Dani et al. (2021) distinguish between

the impact on the environment resulting from food preparation and that generated by the

food and beverage service within the restaurant. The food preparation and cooking phase

involves (El‐Sharkawy and Javed, 2018; Nawaz et al., 2019; Dani et al, 2021): (i) air

pollution, caused by the use of traditional man-made fuels such as wood and charcoal, but

also oils and organic substances subsequently aerosolised and vented into the outside air

by the kitchen exhaust system; (ii) plastic pollution, related to the fact that most raw food,

perishable and non-perishable, is marketed in plastic packaging, which is then dispersed

into the environment and the atmosphere; (iii) water pollution, resulted from the disposal

of cleaning products in lakes and rivers, many of which contain substances that are toxic

to humans, animals and plants and which, being able to remain in the environment for

long periods of time, end up contaminating the food chain; (iv) resource depletion, due to

excessive use of natural and mineral resources, especially in the cooking of food.

Similarly, food and beverage service generates (Chaabane et al., 2018; Kim et al., 2020;

Dani et al, 2021): (i) noise pollution, premises may produce more than 100 dB of noise,

exceeding the 65 dB threshold set by the World Health Organisation (WHO); (ii) waste

generation, whether solid such as food waste, paper, disposable plastic, or liquid, which

contain suspended materials, oils and fats, leftovers, chemicals and biochemicals; (iii)

energy consumption, deriving from air conditioners, lighting or other elements; (iv)

indoor air pollution, caused by combustion smoke, building materials, furniture, cleaning

products, room fragrances, centralised air-conditioning systems and so on.

The adoption of circular and responsible business practices thus becomes an

imperative for restaurant operators, whose choices and behaviour are increasingly being

discussed by public authorities and consumers (Yoon et al., 2020; Chaturvedi et al.,

2022). A growing number of people recognize the issue of sustainability as an important

selection criterion on where to enjoy a meal outside home, prompting restaurateurs to

revise and transform their business in response to a more environmentally conscious and

sensitive audience (Jones et al., 2014; Han et al., 2020). Recent studies show that

consumers have begun to demand sustainable food services with a reduced carbon

footprint (Price et al., 2016), thus preferring restaurants that adopt green measures (Park

et al. 2020).

Despite the obvious importance of adopting a circular economy approach to restaurant

business management, there are still few studies on food ethics and sustainable business

practices applicable to the restaurant sector (Dani et al., 2021). Main focus has been on

identifying and reducing food waste as well as issues related to the quality and healthiness

of the food offered (Greer et al., 2020; Yang et al., 2019). Furthermore, most scholars

have focused on the application of the circular economy within large manufacturing

industries (Kirchherr and van Santen, 2019; Principato et al., 2019; Walker et al., 2021),

despite the undeniable impacts of food service provision in terms of energy and water use,

waste and carbon footprint. To address these gaps, a deeper knowledge on how the

circular model can be declined in food service practices becomes crucial. This aspect

appears even more relevant in the context of small and medium-sized enterprises that

represent a substantial part of the restaurant sector (Iraldo et al., 2017), thus playing a key

role in making the entire ecosystem sustainable.

As specifically regards Italy, it is also worth considering not only the importance of

businesses in the food service industry for national economic development, but also their

strong roots in the country's historical and socio-cultural heritage. Within the current

Italian food supply chain, restaurant plays a leading role; according to the Restaurant

Annual Report of the Italian Federation of Public Establishments (FIPE, 2019), it ranks as

the first sector in the supply chain generating an economic value of 46 billion euros per

year, followed only by agriculture with 25 billion euros. In 2019, there are about 285,000

bars and restaurants that employ 1.2 million people, with an impact on national GDP of

1.4 percent (FIPE, 2019). Despite the less positive data recorded in 2020 due to the

pandemic crisis from COVID-19, the restaurant remains to date a sector that must be

actively involved in the process of sustainable transition, also as an element of connection

and intermediation between the production and consumption systems. As a result,

investigating the current application of circular economy practices within the Italian food

service could act as a stimulus for the development and diffusion of more sustainable

models, both among restaurants and consumers.

3 Research Methodology and Results

In order to investigate the diffusion of circular economy practices within the

restaurant sector and, more specifically, within the piadineria service, the analysis was

conducted through the methodology of the qualitative multiple case study, which is one of

the most widely used tools in carrying out qualitative research. The decision to use the

multiple case study, as a research method in which each case is treated as a single

autonomous unit with its own structure and peculiarities, enables the collection of data

that is more reliable than the single case, thus attributing more rigour to the study of the

observed phenomenon; in addition to this, the replication of the case study on several

realities enables them to be compared and the results obtained to be analysed from a

broader viewpoint. Furthermore, qualitative research provides insight into the opinions,

motivations, and trends with respect to the phenomenon under investigation, aspects that

could not be captured by the purely numerical data of quantitative research (Bryman and

Burgess, 1994).

The study was carried out by means of a questionnaire consisting of 43 questions

divided into four main sections and administered in interviews to seven establishments

belonging to the restaurant sector and located in the city of Pesaro. All these food service

establishments offer piadineria services, but while some are classifiable as small

handicraft businesses with only a take-away service, others have a more complex

organisation and are to be understood as “true” restaurants.

3.1 Selection of cases

The food establishments involved in the survey were selected according to the

following precise and pre-defined selection criteria:

●sector: food service establishments need to belong to the restaurant sector, and in

particular offer piadineria service;

●size: food service establishments need to be small or medium-sized, defined in terms

of turnover and number of employees consistent with the European Commission

Recommendation 2003/361/EC on 6 May 20031;

●location: food service establishments need to be in the city of Pesaro.

Based on these criteria, 10 food service establishments were identified, 7 of which

participated in the study.

The focus on small and medium-sized companies in the Pesaro restaurant sector

derives from the relevance that these businesses have in terms of promoting and

enhancing the city's food and wine heritage. Investigating the application of circular

economy practices by these companies is therefore of significant importance, given the

role they could play in encouraging the adoption of sustainable consumption models not

only locally, but also regionally.

3.2 Questionnaire

The research questionnaire used for the conduct of the interview, which was

administered guaranteeing the anonymity of the respondents, consists of 43 questions

(mainly open-answer and 1 with a 5-point Likert scale) divided into four main sections.

The first relates to the profile of the respondent and collects information on age,

educational qualification and the role played in the management of the establishment. The

second concerns the profile of the establishment and includes general questions on the

year of opening and the type of service provided, but also questions on whether the

1The European Commission Recommendation 2003/361 states that the category of micro,

small and medium-sized enterprises (SMEs) includes those with the following

characteristics: i. number of employees less than 250; ii. annual turnover not exceeding

EUR 50 million or annual balance sheet total not exceeding EUR 43 million. In addition,

it should be noted that small enterprises are defined as enterprises which employ fewer

than 50 persons and whose annual turnover or annual balance sheet total does not exceed

EUR 10 million; micro enterprises are defined as enterprises which employ fewer than 10

persons and whose annual turnover or annual balance sheet total does not exceed EUR 2

million (https://eur-lex.europa.eu/legal-content/IT/TXT/?uri=CELEX%3A32003H0361,

last accessed on 22 March 2023).

business is family-run, the number of employees and the annual turnover. The third one

investigates the current level of adoption and implementation of circular economy

practices addressed in relation to 4 thematic categories, which recall the sustainability

practices for the restaurant sector indicated by Dani et al. (2021) and Camilleri (2021);

these have been organised in sub-sections, namely raw materials and ingredients used,

materials used in service delivery and cleaning products, energy and water consumption

and architecture of the premises, surpluses and food waste. Finally, the fourth section

focuses on the approach to circular practices trying to understand the attention paid to the

issue of environmental sustainability within their operational processes, the importance

recognised to these practices, the main areas of application, the advantages, limitations

and incentives related to their implementation, and future prospects.

3.3 Data collection and analysis

The survey, which was carried out in October 2022, started by consulting the websites

and collecting the contact details of the food service establishments selected using the

criteria described above; in total, 10 establishments were phone contacted and with 7 of

these it was possible to make an appointment for an interview. The number of cases

considered is consistent with the multiple case study theory (Yin, 2003), according to

which it is recommended to analyse between four and twelve units, as a lower number of

units is insufficient for the purposes of structured research, while a higher number makes

data analysis complex. The interview through the administration of the survey

questionnaire, as the only source of data collection, was carried out by personally meeting

the interviewees; this direct interaction enabled an enrichment of the survey from a

qualitative point of view, as it was able to detect sensitivity and interest in the topic

studied.

All interviews were transcribed and validated. The analysis of the interviews was

conducted through the interpretation and content analysis of the answers obtained from

the different food service establishments investigated, following the questionnaire

structure.

3.4 Results

3.4.1 Interviewee profile

The data collected in the first section of the questionnaire, concerning the interviewee

profile, are summarised in Table 1 and show that the respondents are on average 45, 28

years old. Most of them have a high school degree (5 out of 7), while only two have a

middle school degree; all of them are owners of the food service establishment, excluding

one person who works as a staff coordinator.

Table 1: Interviewee profile.

Food

service

establish

ment 1

Food

service

establish

ment 2

Food

service

establish

ment 3

Food

service

establish

ment 4

Food

service

establish

ment 5

Food

service

establish

ment 6

Food

service

establish

ment 7

Age

(years)

Educatio

nal

qualificat

ion

High

school

degree

High

school

degree

High

school

degree

High

school

degree

Secondary

school

degree

High

school

degree

Secondary

school

degree

Position

held in

the

company

Owner

Staff

coordinato

Owner

Source: own elaboration

3.4.2 Company profile

As shown in Table 2, all the establishments investigated have been in business since

the 2000s and thus opened relatively recently, except in the case of establishment 6,

which is older. Food service establishments 3, 5 and 6 are take-away and family-run

piadinerias, with no or at most one employee and a turnover of much less than EUR

500,000 per year, thus constituting small businesses of an artisanal nature and presenting

a rather simple business organisation. Conversely, venues 1, 2 and 4 offer not only a

piadineria service, but also a restaurant service: their menus include appetisers, first and

second courses, side dishes and desserts; they also provide a table service. The latter are

not family-owned and have up to 11, 8 and up to 60 employees respectively. Even these

establishments have an annual turnover of less than EUR 500,000, apart from food

establishment 4. In addition to achieving a turnover of between EUR 3 and 5 million per

year and employing up to 60 employees, establishment 4 in fact has several premises

located in the Pesaro area and beyond. Finally, food establishment 7 is in an intermediate

situation since, although it only provides a take-away piadineria service, it is not a

family-run business and up to 14 persons are employed in its two establishments,

registering a turnover of less than EUR 500,000 per year.

Table 2: Company profile.

Food

service

establish

ment 1

Food

service

establish

ment 2

Food

service

establish

ment 3

Food

service

establish

ment 4

Food

service

establish

ment 5

Food

service

establish

ment 6

Food

service

establish

ment 7

Openi

year

2022

2018

2021

2004

2020

1983

2008

Servic

e type

Piadineria

and

restaurant

Piadineria

and

restaurant

Takeaway

piadineria

Piadineria

and

restaurant

Takeaway

piadineria

Takeaway

piadineria

Takeaway

piadineria

Family

run

YES

Numb

er of

emplo

yees

Up to 11

Up to 60

up to 14

Turnov

range

(2021)

< 500.000

3-5 million

< 500.000

Source: own elaboration

3.4.3 Circular Economy practices

The third section of the questionnaire focuses on the level of adoption and

implementation of circular economy practices by the food establishments surveyed. As

indicated above, these practices are considered in relation to four main thematic

categories. The data emerging from this analysis provide interesting qualitative

information, which can be described as follows:

●raw materials/ingredients/products: all the premises interviewed use raw materials,

ingredients and products from local (Km 0) and/or regional suppliers in the

preparation of their food proposals, in high percentages (at least 50% and up to 90%)

of the total raw materials purchased, with the exception of establishment 2, which

uses only 20%. All the establishments use seasonal raw materials by offering a menu

that is partly fixed and partly composed of proposals that vary according to the

seasonal availability of products (especially vegetables). It should be emphasised that

the data reported shows, in a positive and encouraging manner, an attentive attitude

by all the premises to the purchase of local and seasonal raw materials. As previously

mentioned, local and seasonally-based sourcing processes are among the

sustainability-oriented good practices described by Camilleri (2021), which are

increasingly embraced by businesses in the restaurant (and hotel) sector, as they are

able to guarantee a high quality of the chosen products and reasonable purchasing

costs, especially where restaurateur and supplier work together on an ongoing basis.

Slightly more than half of the premises interviewed (1, 2, 3 and 4) use certified raw

materials and/or products in percentages ranging from 10% to 60% of the total raw

materials purchased, with BIO, IGP, DOP, DOCG, Gluten-Free and ICCAT

certifications prevailing; the remaining premises (5, 6 and 7) do not use certified raw

materials, and in particular premises 7 expresses scepticism on the issue of certified

products, especially BIO ones. From the interviews, it emerges that the choice of

whether or not to use certified raw materials is not only guided by sustainability

reasons but is also closely linked to their cost and the need to satisfy the demands of

those consumers who are more demanding with respect to the authenticity of the

products they consume. None of the restaurants use raw materials and/or products

deriving from socially committed realities, except for restaurant 3 which claims to

purchase its dairy products from a neighbouring therapeutic rehabilitation

community. It can therefore be stated that among the interviewees there is a low

propensity to use alternative supply channels than those with which they usually

interact. At least one vegetarian and/or vegan proposal (sometimes even more than

one) is present in the menus offered by the seven premises interviewed, a sign of the

desire to meet the new consumer dietary trends, which have increased since the

pandemic and are characterised by a lower consumption of processed foods in favour

of healthy foods, such as those of vegetable origin;

●service delivery materials and cleaning products: regarding service delivery, most of

the premises surveyed do not use washable tablecloths and/or napkins or those made

of certified ecological paper. Only three of them (1, 2 and 4) use washable or

non-plastic dishes, glasses and crockery since the opening of the business. For

take-away service, all premises use compostable paper or cardboard packaging

instead of plastic, and in two cases biodegradable bags are also used. In all

establishments, washable towels and/or certified ecological hand dryers are used in

the kitchen, while only three of them have hand dryers instead of paper in the

bathrooms. Only establishment 1 employs the digital menu with the use of QR codes

instead of the traditional paper menu; in all other cases, the menu is made of paper,

sometimes recycled. It is clear, therefore, that premises do not have a uniform and

consistent behaviour in implementing solutions to avoid the use of plastic or reduce

paper consumption in their operations. Although Dani et al. (2021) state that

replacing plastic packaging, wrapping, glasses, dishes, bowls, cutlery, and straws

with those made of environmentally friendly, recyclable or biodegradable materials is

one of the initiatives that a sustainable restaurant should implement, the data show

that such a measure is only partially adopted by the surveyed venues and mostly in

the take-away service. Only establishments 2, 3 and 4 perform the take-away service

by relying on food delivery operators who mainly use polluting means of transport

(scooters or cars). None of the premises purchase certified ecological cleaning

products and only some of these products have an automatic dispenser. This finding

identifies a behaviour that is not in line with what Dani et al. (2021) suggest,

according to which an environmentally sustainable approach includes the use of

organic or natural detergents without toxic chemicals in cleaning processes and the

proper treatment of these;

●energy consumption, water consumption and premises architecture: concerning

energy consumption, only in the case of establishment 4, solar panels have been

installed in one of its premises to help save energy. Most of the interviewed

establishments use energy-efficient household appliances (at least class A++), only

some of them (1, 2, 3 and 4) use sensors with switch-off timers for less used rooms,

while premises 1 and 7 are the only ones with at least 80% class A energy-efficient

lighting. None of the surveyed premises generate renewable energy. In this regard, it

is specified that the minimisation of electricity consumption through the exploitation

of alternative energy sources such as water, wind, and sun, as proposed in the study

by Dani et al. (2021), represent practical actions that require the availability of

adequate infrastructure and ample space, two conditions that almost all the premises

investigated do not possess. With regard to water consumption, on the other hand,

most of the establishments state that they do not have water-efficient flushing

systems in their bathrooms, and only in a few cases are water flow reducers or pedal,

time or photocell control mechanisms applied to bathroom and kitchen taps, denoting

a largely inefficient management of water consumption. None of the premises has

ever achieved voluntary environmental certification for reasons of lack of interest

and/or scarcity of resources (financial or time), preferring in all cases to invest these

resources in achieving mandatory certification. Neither of the premises studied has an

infrastructure built using green building materials and only in the case of

establishment 4 were second-hand furnishings used to equip one of its premises;

●surplus and food waste: in all the premises studied, waste is sorted into at least four

fractions in accordance with municipal regulations and staff are given clear, simple,

and comprehensible instructions on the correct identification of the different types of

waste. All the establishments also collect used cooking oil and fats in special

containers and deliver them to a company specialised in their treatment. Even though

none of the interviewed premises is equipped with a composter or digester, they all

manage waste disposal appropriately and in compliance with the rules imposed by

law. The main strategies adopted to prevent the production of surpluses and food

waste are the management of supplies in relation to production needs and the

decision to keep a minimum amount of stock in the warehouse. These practices are

perfectly consistent with the Just-In-Time purchasing systems and responsible

stock-taking practices described by Camilleri (2021), which are combined with the

careful and no-waste use of raw materials, made-to-order production and, in the case

of the establishment 4, centralised and standardised production. Regarding the

management strategies of any food surpluses produced, these include the provision of

doggy bags for customers, internal reuse, internal redistribution (this is the case of

establishments 4 and 7 which have more than one premises) and joining initiatives to

tackle food waste (this is the case of establishment 5 which uses the Too Good To Go

platform). The use of sharing economy platforms and the use of food-boxes for

customers are not only responsible practices referred to in the literature but represent

sustainability-oriented solutions that are easy to implement, while confirming

themselves as fundamental in limiting food waste.

3.4.4 Approach to circular economy practices

The survey questionnaire concludes with a fourth section whose questions seek to

understand the importance given to the issue of environmental sustainability by the

interviewees and their willingness to introduce circular economy practices in their daily

activities and operational processes. With respect to the importance attributed to circular

practices, respondents were asked to express their opinion using a Likert scale, where 1

indicates not at all important and 5 indicates very important. In this regard, Table 3 shows

that all the analysed premises attribute enough importance (4.43) to the adoption and

implementation of circular economy practices within their establishment(s). The reasons

that primarily motivate these answers are of an economic nature and refer to the

possibility of achieving significant cost savings; secondly, all the interviewees express

interest and personal involvement in the issues of fighting food and resource (especially

energy) waste, respect for the environment, commitment to operate in a sustainable way,

and show a sense of responsibility towards social welfare and that of future generations.

Table 3. Importance given to the implementation of circular economy practices within the

food service establishment's activities and operational processes.

Importance given to the implementation of circular economy practices within

operations and processes

Food service

establishment 1

Food service

establishment 2

Food service

establishment 3

Food service

establishment 4

Food service

establishment 5

Food service

establishment 6

Food service

establishment 7

Mean

4,43

Standard Deviation

0,534

Source: own elaboration

Concerning the areas of circular economy practices application considered most

important, Table 4 shows that all premises indicate energy and water consumption as the

prevailing one, followed by raw material consumption, tied with the area related to the

production of food surpluses and waste. The choice of these specific areas of application

is based on the same motivations as above, to which is added the attention paid to the

quality, freshness and genuineness of the ingredients used in the preparations and

therefore the care dedicated to the selection of the raw materials purchased, which are

mainly local and seasonal.

Table 4. Areas of circular economy practices application considered most important by

interviewees.

Food

service

establish

ment 1

Food

service

establish

ment 2

Food

service

establish

ment 3

Food

service

establish

ment 4

Food

service

establish

ment 5

Food

service

establish

ment 6

Food

service

establish

ment 7

Raw

materials/

ingredient

products

Service

delivery

materials

and

cleaning

products

Energy

and water

consumpti

on,

infrastruct

ure

Food

surpluses

and waste

Source: own elaboration

Finally, the interviewees were asked to express their opinion on the advantages and

limitations of implementing circular economy practices within their premises, and then to

indicate the incentives potentially useful to support the adoption of these practices, and to

describe their future perspectives on the topic.

The benefits mentioned are mainly economic (cost savings), followed by the

possibility of offering customers a higher quality product and ensuring greater

environmental protection by promoting sustainability and reducing all forms of waste

within their operations.

Regarding limitations, all of the premises cite cost constraints (which in the case of

raw materials determine in turn an increase in the final price to the customer, who is not

always willing to recognise a premium price for a sustainable product), time and

regulatory-bureaucratic constraints; in addition, they highlight the problems of

implementing some eco-friendly solutions (with specific reference to the lack of

effectiveness of certified ecological cleaning products), the need for qualified staff for

efficient management of purchasing processes and warehouse stocks, the difficulty of

scheduling production to avoid the generation of surpluses.

On incentives to support the implementation of circular economy practices,

interviewees point to: the introduction of tax relief on the purchase of modern and

environmentally friendly professional equipment, certified raw materials and ingredients

(e.g. organic), compostable or biodegradable packaging; the need for bureaucratic

streamlining, especially in the process of obtaining certifications; lower taxes as a

stimulus to investment due to more available financial resources.

Finally, with respect to future perspectives, premises 1, 2 and 6 express their intention

to introduce further circular economy practices in their operations; in particular,

establishment 1 states that it would like to commit to the complete elimination of plastic

and the use of environmentally friendly cleaning products; establishment 2 expresses

interest in obtaining a voluntary environmental certification in the near future;

establishment 6 would like to renew its equipment and install solar panels. Establishment

4 is inclined towards improving the circular economy practices already implemented,

while premises 3, 5 and 7 do not intend to implement further circular economy practices

in their operations.

It is therefore evident that it is not possible to identify a single direction of future

development valid for all establishments regarding the implementation of circular

economy practices within their operational processes, due to the heterogeneity that

characterises the orientations and approaches of the various interviewees to the issue of

environmental sustainability.

4 Conclusions

The choices and actions taken by small and medium-sized enterprises in the restaurant

sector appear to vary according to their different sustainability orientations and are

strongly dependent on economic and financial determinants. The food service

establishments under investigation have just taken the first steps towards the goal of a

fully sustainable operational approach, much still needs to be done for circular economy

practices to become an integral part of the way of thinking and managing internal

activities and processes. The most widespread and implemented circular economy

practices concern the selection of raw materials and the management of food surplus and

waste. As stated by Camilleri (2021), local and seasonal purchasing processes and good

procedures to deal with food waste enable a higher quality product and lower operating

costs, while protecting the environment.

Conversely, in the fields of energy and water consumption and the architecture of

restaurant establishments, only a few measures are taken to promote a more sustainable

operational approach. Dani et al. (2021) point out that practices such as the use of

alternative energy sources (e.g., water, wind, and sun) require the availability of adequate

infrastructure and ample space; these are two conditions that most of the establishments

investigated do not possess. Although all the interviewed business owners recognise the

importance and benefits of adopting circular economy practices, there are still many

difficulties that these small and medium-sized enterprises encounter in their

implementation; these include cost, time and regulatory-bureaucratic constraints and the

lack of proper sustainable management skills. This result appears to be in line with what

has been found in the literature with respect to the main barriers faced by Italian SMEs

with respect to their circular transformation, namely the limited human, economic and

time resources (Salvioni et al., 2022). To cope with these limitations, the analysed

piadinerias emphasise the need for more support from local and national authorities in

terms of economic incentives, reduction of bureaucratic procedures and green investments

in the restaurant industry.

This study contributes to enriching the literature on the circular economy applied to

the restaurant sector by offering an overview of the current degree of implementation and

diffusion of sustainable practices within small and medium-sized enterprises, which to

date have been little explored, although they constitute a crucial part of this industry. In

this perspective, several important aspects were explored and highlighted, such as the

importance given to the implementation of circular economy practices within its own

business, their degree of diffusion, the advantages and limitations associated with them.

The research also provides interesting managerial implications for restaurant operators

and public authorities. Managers and practitioners could use the developed framework as

a tool to assess their current level of maturity with respect to the implementation of

circular economy practices, identifying critical areas, needs for improvement and

priorities for action. Similarly, politicians could become aware of the need to introduce

measures to promote environmentally friendly investments, which could address the

difficulties faced by small and medium-sized enterprises in the sector and encourage the

adoption of a sustainable management approach.

The paper also presents some limitations. Specifically, the sample consists of

establishments operating exclusively in the city of Pesaro. Similarly, the premises

considered are mainly specialised in the piadineria service. In the future, it would be

interesting to extend the research to other businesses in the restaurant sector and to

consider different Italian geographical areas, to identify similarities, differences and main

priorities for intervention.

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Sustainability practice in first-generation family firms.

Some empirical evidence from the Scanian wine

sector

Henrietta Nilson

Department of Business, Innovation and Sustainability

Halmstad University

Krisitan IV:väg 3, Halmstad (Sweden)

E-mail: henrietta.nilson@hh.se

Annalisa Sentuti

Department of Economics, Society and Politics (DESP)

University of Urbino

Via Saffi 42, Urbino PU (Italy)

E-mail: annalisa.sentuti@uniurb.it

Francesca Maria Cesaroni

Department of Economics, Society and Politics (DESP)

University of Urbino

Via Saffi 42, Urbino PU (Italy)

E-mail: francesca.cesaroni@uniurb.it

Abstract

In family business studies, sustainability is an upcoming subject. The wine sector is an

industry in which family firms and sustainable practices are deeply intertwined and

widely analysed. Prior research focused on long-lasting family businesses in old and

mature wine districts. This study aims to identify and understand sustainability practices

in first-generation family firms in the emerging Scanian wine sector, with a particular

focus on copreneurial ventures.

By embracing a micro-foundational lens, the research focuses on the individual level,

i.e., the family members at the head of the business, and aims to answer the following

research questions: (RQ1) How do first-generation family firm members in a nascent

wine country make sense of sustainability practices? and (RQ2) How do they integrate

sustainability into their family firms?

We have adopted a qualitative approach based on multiple case studies and collected

data from three copreneurial ventures. Using Gioia method to analyse data, we have

identified two aggregate dimensions: foundations of sustainability and sustainability

development. “Foundations of sustainability” refers to RQ1 and concerns how

first-generation family firm members make sense of sustainability practices. This

dimension includes three themes: values, well-being and living in nature, more than

organic. The “sustainability development” dimension refers to RQ2 and concerns how

first-generation family firm members integrate sustainability practices into their family

firms. This dimension includes two themes: experiencing sustainability and spreading

sustainability.

The paper contributes to deepening knowledge of how family members interpret

sustainability and translate it into their business and aims to get to the root of

sustainability by providing a theoretical explanation of how firm-level outcomes

(sustainability practices, in our case) emerge from the values, beliefs and behaviours of

individuals.

Keywords – First-generation family firms, Copreneurial ventures, Sustainability, Wine

sector, Sweden.

Paper type – Academic Research Paper [work in progress]

1 Introduction

Family firms build the backbone of every society; they are highly heterogeneous

(Westhead & Howorth, 2007) and the predominant form of enterprise in the world

(Sharma et al., 2012). Family firms are strongly influenced by the family’s binding social

ties, emotional attachment and assuring longevity (Gómez-Mejía et al., 2007;

Gómez-Mejía et al., 2010; Gómez-Mejía et al., 2011). Therefore, sustainability in the

sense of firm survival is included as a natural concept in family firms (Abdelzaher et al.,

2018).

Looking at recent research within family business, sustainability is an upcoming

subject: see Adomako et al. (2019); Broccardo et al. (2019); Dayan et al. (2019); Mullens,

(2018) among others.

There are several definitions of sustainability in family firms that refer to different

meanings e.g. serving stakeholders over time (Gunry et al., 2014), the business’s effects

(Huseh, 2018) and long-term effects for future generations (Jayakumar, 2017). As the

dominating form of business, family firms have a huge responsibility to accelerate their

sustainability work into practices that embrace sustainable thinking throughout the whole

working process (López-Perez et al., 2018) and ensure it to be both profitable and

environmentally friendly (Jayakumar, 2016).

Sustainability in family business studies has been discussed from mainly two different

perspectives: 1) the survival and longevity of the family firm (Canovi & Lyon, 2020) and

2) social and environmental sustainability, such as sustainable processes, products and

practices (Miroshnychenko & De Massis, 2022) This study focuses on the latter

perspective.

Sustainability business practices can be defined as a business that both improves

profitability and embraces a business strategy that keeps the environment healthy and

sustainable (Larson et al., 2000). It can be divided into internal sustainability practice

(pollution prevention and green supply chain management) and external sustainability

practices (green product development) (Miroshnychenko & De Massis, 2022).

Le-Breton Miller & Miller (2016) reason that family firms’ relationship to

sustainability on one hand must consider family values and long-term orientation and, on

the other, family conflicts, private socio-emotional wealth and performance (Le-Breton

Miller & Miller, 2016; Adomako et al., 2019). However, family firms’ longevity is not a

prerequisite for sustainability practices (Memili et al., 2018); instead, differences have

been identified among early and later generations in how environmentally and socially

responsible family firms act (Adomako et al., 2019).

According to Broccardo et al. (2019), small and medium sized, young family firms

have a more positive impact on sustainable and green practices (Dayan et al., 2019). The

fact that later-generation family firms are keener on sustainability investments (Mullens,

2018) points in a direction that sustainability becomes more of a mindset.

Despite that, we know very little about first-generation family firms and their

understanding of, and attitude towards, sustainability practices (Sharma & Sharma, 2021)

and how they are integrated and distributed in the family business from the start

(Miroshnychenko & De Massis, 2022).

The wine sector is an industry in which family firms and sustainable practices are

deeply intertwined and widely analysed. Extant literature shows that old, mature wine

districts such as France, Italy, South Africa, Australia, New Zealand, US and Chile

(Corbo et al., 2014; Flores, 2018) have been broadly explored. However, a knowledge gap

exists on first-generation family firms’ work in sustainability practices in the cool climate

wine sector like Sweden. Sweden is a country in Scandinavia, famous for being one of the

most sustainable countries in the world (Mänsson, 2016). Due to climate change, Sweden

has surprisingly become a wine country with a commercialised wine production and

growth. It is an award-winning country for its wine and has started building a wine region

in Sweden’s southernmost part — Scania. The region holds approximately 55 registered

vineyards out of which 35 are commercial and the major part are family firms

(Livsmedelsföretagen, 2020; Föreningen svenskt vin, 2020).

In this regard, Broccardo et al., (2019) states that family business research needs to

accelerate empirical qualitative studies on drivers and obstructions to sustainability

practices and create an understanding of family firms´ sustainable behaviour (Dayan et

al., 2019) and the entire distribution of sustainability practices (Miroshnychenko & De

Massis, 2022). Still, there is very little knowledge about sustainability practices in young

family firms in emerging markets (Adomako et al., 2019), those active in related

industries (Le-Breton Miller & Miller, 2016) or how sustainability practices are

implemented (Lopez-Perez et al., 2018; Memili et al., 2018).

Therefore, this study aims to identify and understand features of sustainability

practices in first-generation family firms in the Scanian wine sector. Specifically, the

study embraces a microfoundational lens (De Massis & Foss, 2018), providing a

theoretical explanation of how firm-level outcomes (sustainability practices, in our case)

emerge from the values, beliefs and behaviours of individuals (family members, in our

case) (Felin et al., 2015). Namely, the research focuses on the individual level, i.e., the

family members at the head of the business, and aims to understand how their values,

motivations and expectations give rise to and shape the sustainability practices adopted by

the family business. In this sense, the study aims to get to the root of sustainability

practices by understanding how family members interpret this concept and translate it into

their business. On this basis, the paper will answer the following research questions:

(RQ1) How do first-generation family firm members in a nascent wine country make

sense of sustainability practices? and (RQ2) How do they integrate sustainability into

their family firms?

2 Theoretical background

2.1 Family firms

Family firms can be defined by their unified system of economic resources and

capabilities that affect performance (Basco, 2013; Frank et al., 2010) and bring wealth for

coming generations (Habbershon et al., 2003; Reay, et al., 2015). What family firms have

in common is the capacity to capitalise on preservation and knowledge creation within the

firm and with external stakeholders (Carney, 2005). This in turn influences cash holding,

gives room for flexibility (Caprio et al., 2020) and makes family firms less sensitive to

financial shocks (Škare & Porada-Rochoń, 2021).

Whilst family firms have been synonymously categorised into one domain of

businesses, there are studies that focus on the differences among family and non-family

firms; albeit those differences, there are even greater differences among family firms

(Chua et al., 2012). This creates a family firm heterogeneity that can be defined as “[…]

the range of categorical and/or variational difference(s) between or among family firms at

a given time or across time” (Daspit et al., 2021, p. 298). Albeit family business literature

explains heterogeneity through succession, firm size and growth, and family-based

capital, the level of analyse has been focused on the firm. Studies using the controlling

family as the level of analyse is still very scarce (Daspit et al., 2021).

The composition of the controlling family could be an interesting element of

heterogeneity (Zellweger, 2017). Among the various possible combinations, the so-called

copreneurial venture can be considered a subset of family businesses, one of many

expressions of the heterogeneity of family business as a phenomenon. A copreneurial

venture is a family firm owned and managed by ‘a male and female couple, integrated as

a working team’ (Kuschel and Lepeley, 2016). Living and starting a business together as a

couple is a specific situation that has also been labelled co-preneurship (Fletcher, 2010).

Coupreneurs are often the foundation and starting point of many family businesses

(Nieman, 2006). Studies on copreneurs highlights work/family relationships (Wu et al.,

2010), how copreneurship operates (Fletcher, 2010) and the link between

entrepreneurship and family business (Hedberg and Danes, 2012). Sentuti et al. (2019)

found that copreneurial ventures is an overlooked theme that needs further investigation,

because it offers an important and novel perspective on family business studies.

2.2 Sustainability practices in family firms

Sustainability practices in family firms has been defined as “those that work towards

the long-term benefit of all of an organisation’s stakeholders — the broader community

included” (Le-Breton Miller & Miller, 2016, p. 26) and have been discussed from several

perspectives, such as long-term orientation (Kallmuenzer et al., 2018), long term

investment (Memili et al., 2018) and the size of the firm (Broccardo et al., 2019).

Studies about family firms and sustainability was widely neglected until 2020 (Curado

& Mota, 2021; Clauß et al., 2022). Most of the studies have focused on countries like

Italy and Spain and mainly used quantitative methods. Scholars have acknowledged that

social inclusion, economic development and environmental protection play relevant roles

in sustainable business development and adopting sustainable practices (Curado & Mota,

2021).

What is shown is that firm age does not seem to have any significance regarding

family firms environmentally sustainable orientation (Adomako et al., 2019); however,

what does seem to affect sustainability practice is the generation of the family firm.

Sharma et al. (2021) have pointed out some advantages that differentiate first-generation

family firms from other generations when it comes to sustainability practices. For

instance, the possibility of integrating sustainability principles daily instead of changing

an established culture, and at the same time looking after the family´s sustainability core

values. First-generation family firms can further enhance sustainability practices by

designing the business in a way that can ensure sustainability as a driver for expansion

and growth (Sharma & Sharma, 2021) as well as be a ground for the core of the business

(Seow & José Parada, 2021). The challenge however is the need to sacrifice short-term

returns and customer investment in favour of long-term orientation. Other forms of

long-term orientation are to keep employees over time by fair treatment and sharing a

sustainable mindset (Sharma et al., 2021).

One sector that is deeply involved in sustainability is the wine industry, in which

extant literature has mainly focused on three different areas of interest. First,

environmental impact such as water footprint (Aivazidou & Tsolakis, 2020),

environmental effects (Bartocci et al., 2017; Ferrari, et al. 2018) and carbon footprint

(Carrasco et al., 2021; D’Ammaro, et al., 2021). Second, the agricultural phase such as

life cycle assessment (Arcese et al., 2017) and viticulture (Chiriaco, et al. 2019). Finally,

the winemaking phase such as waste (Ahmad et al., 2020) or packaging (Ferrara et al.,

2020).

In this regard, studies on New Zealand’s wine producing family firms show that

family influence, such as family ownership, recourses, identity and values, are affecting

their work on environmental sustainability. Positive drivers for biodynamic practices are

health for family, coworkers, and external contacts (Kariyapperuma & Collins, 2021).

In the Italian wine sector, researchers highlight that compared to private non-family

firms, family firms are more prone to investing in sustainability projects such as

production, organic farming, employee’s benefits and product quality. They further

articulate that taken sustainability actions indicate better economic results (Broccardo &

Zicari, 2020).

In this vein, a study between Spanish family and non-family wine making firms has

revealed that family firms return on assets and operating margin are higher and the debt

and debt ratio is lower. The authors suggest that it depends on advantages in the product’s

price and lower agency costs. This in turn results from lower risk exposure and increased

long-term financing in family firms. What is highlighted further is that the profitability is

generated from family firm’s greater efficiency, e.g., key competencies, family culture

and strategic flexibility (Soler et al., 2017).

As studies have shown, heterogeneity in sustainability is primarily affected by

founding owners and their families’ values; specifically when two or more generation

family members are working together (Kariyapperuma & Collins, 2021). However,

research does not show how heterogeneity occurs among first-generation family firms.

Specifically, scholars have acknowledged that specific types of family firms such as

copreneurial ventures, working in related industries (as the wine sector), need to be more

investigated (Breton-Miller & Miller, 2016; Sentuti et al., 2019), in addition to the

relationship between family firms and sustainable wine production (Soler et al., 2017).

Researchers have taken into consideration that primary data needs to be used to

understand how family logics and commercial logics coexist and its influences on

environmental sustainability (Kariyapperuma & Collins, 2021). What calls for further

investigation is how sustainability options guide family business strategies and how

family business decisions influence sustainability work (Curado & Mota, 2021).

In their call for papers, Clauß et al., (2022) have indicated that how sustainability is or

can be integrated into family business, what drivers motive sustainability initiatives and to

what extend family firms contribute to sustainable innovation are still neglected in

research. Conducted research has also highlighted the ethical and economical mindset to

improve viticulture (Mancuso, et al. 2022) to empirically investigate internal drivers and

the learning potential in relation to sustainability (Flores, 2018) and proactive strategies

with sustainability in the centre of firm logic (Broccardo & Zicari, 2020).

The above-mentioned call for research in its whole or in its parts stimulated this study,

which aims to fill some of the gaps identified in the literature.

3 Method

3.1 Context

Scania, in the southern part of Sweden, is has a typical landscape for agriculture with

mild winters and medium hot summers. As global climate change has affected Sweden, it

has become a great opportunity for viticulture.

For most winegrowers, interest in wine started as a hobby but emerged over time,

resulting in a business startup after retirement or during a career change. The

winegrowers in this study are engaged or married couples working together in family

firms.

3.2 Data Collection

To address the research questions, the study has focused on three Scanian coupreneurs

in first-generation wine making family firms – Kallerud’s vineyard, Frosarp’s vineyard

and Alnarp’s vineyard. The study draws on firsthand data (Holstein & Gubrium, 2000)

collected from the couples’ narratives about their experience (Riessman & Quinney,

2005). As narratives reveal how people perceive themselves in a context (Josselson &

Hopkins, 2015), they help us to understand the meaning of (Dalpiaz et al., 2014; Gabriel,

2015; Kostera, 2006), and how, sustainable practices are implemented into the family

firm. The empirical research is still ongoing to collect further data and expand the number

of case studies.

3.3 Data Analysis

The data has been analysed according to Gioia et al’s (2012) three-step structure.

First, a close reading of the narratives to unravel 1st order concepts and understand the

coupreneurs’ context in which they integrate sustainability into their everyday business.

Second, as the study sought a deeper understanding of how the coupreneurs are

constructing the meaning (Bruner, 1990) of sustainability, an analysis of 2nd order themes

(Gioia, et al., 2012) helped to identify their invisible processes and underlying aims

(Gabriel, 2015). The third step analysed and pulled forth the aggregated dimensions of the

themes into an aggregate dimension as foundation for theory building. Because of space

restrictions, the complete data structure generated and analysed in the study is not

included in the paper but is available on request from the authors.

4 Findings

4.1 Case A – Kallerud´s vineyard

Kallerud´s vineyard started in 2001 and became a family firm in 2005 and was a sole

trader until April 2022 when it was changed to a limited company. The vineyard is owned

by the couple Leya and Martin (55 and 56 years old), who have one external employee

working full time. During high seasons extra staff is hired and Martin’s father (now over

80) helps the couple with the extra he can manage.

The start of Kallerud is grounded in the couple’s genuine interest in wine. They liked

to drink and learn about wine. They were active in a nonprofit association about wine and

gradually wanted to grow their own wine. The initial idea was to buy a vineyard abroad,

but in 1999 they read in a paper that it was possible to grow wine in Denmark. “If they

can grow wine in Denmark, then we can also.”

They went to Denmark and talked to the Danish farmer Mikael Bondesson. In 1999

they put their first 500 plants on Leyas’s sister´s land. Then in 2001 they started to grow

plants on Martin´s parent’s farm, where they now live and work: “We are here to stay”.

Sustainability at Kallerud means keeping the crop organic and as non-toxic as

possible. It is not necessary that the whole business chain is organic; however, the aim is

to be as organic as possible and use locally produced items and goods. “… it is important

to buy, for example, cardboard boxes locally, and not just order something that is cheaper

from China.”

The word sustainability is connected to well-being, which means that all involved in

their business chain shall feel and be well. Well-being includes everything from the land

and soil to the bottle producer. “The thoughts of sustainability in our world would have

been broken if we would have ordered cheap cardboard boxes from China just because of

the price.” The couple is thinking about sustainability in every step of the business chain;

however, sustainability is also deeply connected to good quality. “Sustainability is quality

for us, not any throw-away; it should be something that is worthy and add something.”

In practice, Kallerud has established sustainability as they use no toxics and do all the

work and harvest by hand, compared to international vineyards that use machines. “[…]

we sort out the bad grapes manually so that there are only fine ones left. The wine will be

bad if you mix bad and good grapes.”

The biggest obstacle for sustainability practices at Kallerud is logistics and

transporting. Unlike foreign vineyards, Swedish vineyards, due to the Swedish State

monopoly, are not allowed to have cellar door sales. The sale is regulated and allows them

to sell only to Systembolaget (the monopoly shop) and restaurants. The couple transports

wine themselves to restaurants nearby; however, for longer transportation they need to

hire a transporter.

“If we could have our sales here — then we could avoid heavy transports that are

both expensive, complicated and pollute nature.”

The firm has existed for 20 years, and their philosophy from the start has always been

to work along and with nature. Therefore, one example is to give back to the soil what has

been taken. “[..] when we pressed the grapes, we throw the peel back into the vineyard

again; what we take we give back.”

The learnings of 20 years of wine producing is that weather is a factor you cannot

change; you must do your best with what you have. The mix of plants is a lesson they also

had to learn, e.g., grapes are not suitable for the Swedish climate, or plants sensitive to

diseases, that accordingly need to be treated with toxics (which is something they don’t

want to do) or plants late in their growth, which is not appropriate together with plants

that grow faster.

Having a family business works fine for the couple, even if, at times, it is difficult to

draw a line between their work and private life. “During high season you have to

prioritise work — that’s it ”. The only time of the year the couple take off work is during

winter.“[…] we just jump into our car with dogs and everything and drive away.”

The family firm affects family life in different ways; however, it doesn’t bother them.

“We have nothing to compare our life to; however, you get stronger as partners[...]”.

Even if the family firm demands hard work that limits the possibilities to take vacation, it

is in some strange way a sort of security, which other people don’t get. “If you compare

yourself to other people that have 5 weeks of paid vacation and can go anywhere, they

don’t understand that this is freedom to us.” Freedom is being outdoors, in nature, and

planning the administrative work as we please. “If we wake up at 5 in the morning, I can

do the administrative work and then be outdoors. It is another kind of freedom — to plan

our time as we please.”

What is most important for the couple is to be healthy and feel well, instead of having

a stressful job and be tightly scheduled. The family has never been interested in chasing

money or buying stuff such as the latest car or a fancy TV in every room — they are

happy with one TV and one computer. “We have food on the table; that’s more important

than stuff […] it is an honour and privilege to live this life[..]. We live our dream.”

Leya proudly showed us the vineyard and the surrounding land. She talked about the

bees and how they (Leya and Martin) have put a flower meadow beside the vineyard so

that the bees “have something to collect” and that they also built bee-houses. This was not

something special for the grapevine; it’s a way of “living along with nature”.

4.2 Case B – Frosarp’s vineyard

Andrew and Bella became interested in wine when they lived in England. They lived

next door to a wine dealer who bought wine directly from producers. He told stories about

how the wine was made and knew everything about those vineyards. The couple were

interested and fascinated about the big difference between various vineyards. Their wine

interest started in London. But then they moved home to Sweden, to a ranch, and started a

new business. Their profession was personal efficiency in big companies.

As their ranch (Bella and Andrew’s) was big enough for viticulture, they thought it

would be fun to try to grow wine themselves. The only problem was that their village was

situated in a hinterland climate zone which sometimes causes frost in May after a warm

period. So, after 3 years they realised that this is not working. As their interest in wine

growing increased, they started to look for properties suitable for growing grapes.

In 2010, at 60 years old, they moved to a new farm. They ran their business until 2011

and sold it to one of their employees. And after that they decided to dedicate their time to

wine. However, in the meantime, they took summer classes in Nordic viticulture, went on

trips to Germany to learn more about vinification and got engaged at the Swedish wine

association. Since then, they have tried to learn as much as possible; personal

development is their driving force. At the age of 61 they retired. Nowadays they have a

commercial vineyard, where they sell their wine and have wine tastings. However, they

do not earn their living on it.

They have been working together for a very long time. As they have different

competences and backgrounds, they have different skills, which make them a unique

combination. “Even if we sometimes have our conflicts, it works very well — we always

have something to talk about.” Compared to couples that have different jobs and

occupations, they may have fewer problems.

Knowledge is the main thing for the couple. Due to the overload of knowledge you

need to grasp viticulture, Andrew has focused on the winery, and Bella has concentrated

on the vineyard. They usually discuss how to proceed but as Andrew is more into

chemistry and Bella is interested in doing other things, it ended up that way. “We always

enjoy each other’s company and have a pleasant time together. There is always something

to do. We also have a mutual interest in marketing.”

The first and most important value that guides their firm is honesty with their

customers. The couple tries to be available, and as they have a small-scale business, they

are keen on highlighting just that.

“The family aspect of our firm is important in relation to our customer, and as we try

to bring on a personal approach, it also generates friends.”

Since they have a lot of experience running businesses and handling the bookkeeping,

it was easy for them starting up and name a new one. Bella has been working as a former

bank manager; however, Andrew has become the one who does all the bank business and

Bella has become more of a controller. The upside of running a business as a family is

that they always develop and grow personally and become nerdy about it, so nerdy that all

their holiday trips are at vineyards. However, the downside is that it can be seen as

insular.

“The fascinating part about wine is that a lot of people are interested, feel the same

way and want to know everything. However, since we are so into wine, it can just as well

be our interest that guides the conversation when meeting new people.” The goal of

running a family business is the journey in itself; the couple are going to continue as long

as they can manage.

The couple grows special plants to assure regrowth; it is all about not poisoning the

soil. “Sustainability is about the wellness of the ground and soil.” However, the bottles

are an issue, too. They have now changed to glass corks. They are thinking that the next

step could be PET bottles. They are minimising the use of recourses and the imprint on

the environment; for example, in the last 3 years, they have used an electric car for the

delivery of their wine to Systembolaget (monopoly liquor shop) and the surrounding

restaurants. They are also using solar cells to charge the winery, car and their house.

Everything from the vineyard that they cut down goes into the compost and then they

mulch it back into the soil. They have also switched from chemical fertiliser to manure,

which they can get from their neighbour’s cows. “Depending on the cow’s diet, some

work and others don’t.”

On the vineyard they have a pond where they let meadow-flowers grow. As the wine

is self-pollinating, the aim is to contribute to the pollination of other plants and flowers

and, as a result, support insects and animals. “We love nature and our garden.” Bella’s

main interest is nature, animals and birds.

In Sweden grapes cannot be sprayed due to strict regulations; so, they have

concentrated on decease resistant grapes. “Our vineyard is completely clean and more

than organic because we do not spray the grapes with copper as they do in Europe.”

Their wine is not certified due to the extra costs. The viticulture could be organic,

biodynamic or “krav” certified. “We could get certified to be an organic vineyard;

however, if our neighbour sprayed their crop and some got on our grapes, the

certification would be withdrawn for three years. Many vineyards’ grapes were ruined

because of that.” Therefore, they made a list of hormones that can damage grapes and

gave it to the surrounding farmers. Even though the neighbours are following all the rules

and keeping a distance, some spray evaporates and spreads throughout the air, which

means it can come down on crops from a distance. The only thing the couple can do is to

plead to the farmers. “However, as farmers risk penalty for damaged crops, the problem

is increasing in Sweden due to the entrance of many small vineyards. As a result, the

vineyards can pave the way for a poison free viticulture.”

“For years, you had no clue what the farmers were up to; however, now there are

vineyards popping up, and by spreading their lists, knowledge is reaching farmers

everywhere, and it has increased their interest in sustainable agriculture.”

One problem for the couple is finding staff that can learn the handicraft of wine

growing. At this moment, they are trying to get schools and institutions to help educate

more people about viticulture. The branch of industry is growing, and they need more

staff, both for the vineyard and the winery. They have discussed having a continuation

course about viticulture with educational actors.

The couple is positive about the distribution of wine to Systembolaget in combination

with cellar door sales, which at the moment are not allowed in Sweden. For example, if

they have visitors on a Sunday from the northern part of Sweden and they would like to

bring their favourite wine home, and the wine has sold out on Systembolaget, it would be

idiotic not to have the opportunity to buy it from us. Now a proposition has been brought

to the Swedish parliament to allow customers to buy 3-litres of wine when visiting a

vineyard.

Their children are not interested in taking over the vineyard. One of their

grandchildren tried working there; however, he decided to be a lawyer. “Previously it was

common that you started a vineyard when you retired; nowadays things have changed,

and young people are starting with the aim of their children taking over. “What they can

see further is that investors are putting a lot of capital into the business and going big

from start. To solve the issue with employees, they are hiring staff from China, America,

France, Argentina and Australia. “One problem with foreign workers is the challenge of

getting them to stay longer than 2 years. To solve this problem, the vineyards have

advertised for couples to come and work on Swedish vineyards.” The strategy went very

well and they got more than 60 responses. One example is a Frenchman and his Swedish

wife who moved here, so, as a result, they may stay permanently. To sum up, there are

two different kinds of vineyards in Sweden—the small ones and the big with a lot of

invested capital. The latter are owners but not working on the vineyards themselves.

“There’s a nice atmosphere among vineyard owners; we are more colleagues than

competitors, and we call each other and talk about different issues and things.”

4.3 Case C – Alnarp’s vineyard

The couple, Anna (18 years) and Josef (23), met very young. Josef was running his

own firm and Anna started working there during her studies. Anna did the bookkeeping

and Josef worked in the store. The couple has always worked together. They work in

different areas and talk a lot about the firm and what to do.

Anna went to university to become a teacher in biology and science, and Josef is a

self-made builder and entrepreneur. “I talked to my husband and said – I think I want to

work with wine in some way.” During her education to become a teacher Anna and her

schoolmates visited a place called Alnarp in Scania. The place was so beautiful that when

the couple were looking for a farm to buy, they focused on, and found one, in Alnarp. The

farm was in bad shape and needed continuously renovation. “Josef needs to be busy and

work on new projects for the house otherwise he will be sad.”

Every penny the couple made was re-invested into the house, a job that continued for

10 years. The investment of the house paid off so when the couple were about to start

their vineyard, they could hypothecate the house to get funding for plants and equipment

needed for wine production. At that time the couple were 28 and 33 years old. “We had

our full time jobs and everything we earned we reinvested into the house.”

The wine growing started on a small scale from one hectare and has expanded to 30

hectare throughout the years and is increasing each year. The income from the vineyard is

re-invested into the farm. They never had any investors; they wanted to build it on their

own. They can now make a living and they quit their part-time jobs 4 years ago.

During wintertime they have one winemaker, one viticulturist and 4 people cutting the

grapevine; they pay salary to about 10 employees in February. On the other hand, in July,

they pay about 60 employees who work in the vineyard, restaurant, hotel and glamping.

During off season the guests stay at the vineyard; however, in the summer, there are a lot

of tourists that own summer houses, so they visit to drink, eat food and have guided tours.

“The wine is attracting people to come; however, it is the other businesses that makes it

profitable.” Now, at first, they made a living on the wine production, but without the

profit from the restaurant and hotel they could not expand. The couple takes a minimum

salary and the rest is re-invested into the business. “There are always holes to fill with

money in a business.”

Big vineyards often have investors that also have a say in each decision and a

comment on return on investment. The couple wants to keep the business in the family.

“We don’t want to give anything away, we want to build.”

It took 5 years to get the first harvest of grapes. In the beginning, the couple had no

plans to run a restaurant and hotel. However, they are happy they changed their minds to

avoid bankruptcy. The first few years the vineyard produced very little wine, almost

nothing. Now the vineyard produces approximately 50,000-70,000 litres a year.

The wine is sold to Systembolaget (the authorised liquor shops), other restaurants and

for consumption on the vineyard. As soon as the regulation of cellar door sales is

released, the couple will start selling. The current government is working on a decision.

“It would make a huge difference for the vineyard, with opening hours during the

whole year, and the guests could buy some wine to take home.”

The couple has 4 children. The eldest daughter is 21, and she manages the restaurant

during summers. She is in charge of scheduling and she is really competent. The next

child is their 19-year-old boy. He has started studying architecture at university, so he will

end up doing all the design and calculations on up-and-coming building projects like his

dad. He enjoys working in the restaurant during summer break; however, he is not a very

social person, so he is a wedding-planner and is really competent. The youngest daughter

is 17 and works in the restaurant during weekends; she and her boyfriend are servers. The

youngest boy is 9, and he enjoys helping out by carrying things.

During off season the family takes vacations 3 to 4 times a year. Everybody in the

family that wants to come, and their boyfriends are even welcome to join. “There is much

work if you stay at home, but when you travel it is another thing — it’s so cosy.”

The vineyard ought to be as sustainable as possible. The couple cultivates to keep the

soil as healthy as possible when the time comes for the kids to take over and avoid sprays.

“Sustainability is the biggest thing for us”, and for the couple it means integrating it in

every step and every development of their firm.

“Sustainability means not destroying anything on the land while harvesting grapes

and keeping the quality of the soil as high or higher as when we started.” At the moment

the couple is working on creating zero carbon dioxide. A lot of carbon is produced during

the fermentation process, and if they can capture and compress the carbon, they would be

negative in carbon emission. It would then be possible to sell it to others that use carbon;

however, their hope is that the sustainability evolution will make it possible to press it

back down to the ground instead of letting it out into the atmosphere. They also brought

up the discussion with Atlas Copco.

The couple is way ahead the movement on sustainability (which is one of those things

that Josef is spending his nights thinking about), and when the movement has caught up

— the couple can easily join.

Between the grapevine they grow plants rich in nitric, and their roots nourish the

grapevine. They have also tried mini sheep, a type called Baby Doll. They are so small

that they can walk under the grapevine and graze. As a result, the couple saves some

diesel from the cutting machines; however, sheep also spread methane gas so the carbon

footprint will not be that much lesser. “Our vineyard can be seen as one of the most

sustainable vineyards in the world.” The couple doesn’t use any sort of spray and doesn’t

need to as they grow grapes that are immune to diseases. They also have zero carbon

imprint, don’t use chemical fertiliser, use light bottles, refuse to export their wine and use

big plastic bottles (30 litres) for wine delivery to restaurants and bars. They don’t have

any certifications as some of them are less sustainable than the vineyard already is. “We

are more than organic.”

The only issue the couple experience is how they are going to sell their wine. The

customers are visiting the vineyard and the couple would have been able to sell off the

whole production to them, however cellar door sales are not allowed in Sweden. If

changes in regulations are not coming any time soon the couple finds themselves forced

to export their wine. “It´s idiotic to export our wine to New Zealand, Japan or China and

at the same time thinking about sustainability.”

5 Discussion

This preliminary analysis of the narratives has allowed us to offer an initial answer to

the research questions that motivate our study: (RQ1) How do first-generation family firm

members in a nascent wine country make sense of sustainability practices and (RQ2) How

do they integrate sustainability practices into their family firms?

Although the three vineyards are first-generation family firms in the same industry

(Le-Breton Miller & Miller, 2016), during the same time, in the same district,

heterogeneity (Daspit et al., 2021) between copreneurs became visible (Chua et al., 2012).

We identified two aggregate dimensions to describe these differences and similarities:

foundations of sustainability and sustainability development.

The “foundations of sustainability” dimension refers to RQ1 and concerns how

first-generation family firm members make sense of sustainability practices. This

dimension includes three themes: values, well-being and living in nature, more than

organic. They represent the main aspects that emerged from the narratives to explain the

meaning, in terms of sense and signification of implementing sustainability practices, to

the interviewees.

Being sustainable means, first of all, giving substance to specific values (Schwartz et

al., 2012) that are particularly clear in the narratives: the willingness to preserve the

natural environment, the freedom to cultivate one’s own ideas and abilities and the

freedom to determine one’s own actions. These shared values represent an element that in

each family firm ties the couple together in doing business. This is consistent with prior

research that pointed out that a family shares common values as key factor in tying the

family together and acting like cultural drivers (Gómez-Mejía et al., 2011).

Furthermore, sustainability means well-being and living in close contact with nature,

in tune with it. We decided to put these two aspects together because they are closely

linked, as for the interviewees their well-being is strongly related to “living along with

nature”. Although working in a vineyard is demanding with a heavy workload during

high seasons, the opportunity to be outdoors in nature is worth the while. The couples

often mention well-being and wellness, which includes everything that has to do with the

environment (land, soil, plants and animals) and all people involved in their business

chain. Consistent with the values underlying sustainability, the latter is not limited to

respect for the environment but becomes a lifestyle. Sustainability means personal

freedom, respect for oneself, one’s own rhythms, one’s own times and also doing without

having interest in luxury living in order to invest in the realisation of one’s dreams. These

concepts go beyond the classical work-life balance because it is not only about reaching

an equilibrium between life and work but also finding harmony with values and deep

well-being in what one does. It is a kind of “personal sustainability”.

Finally, sustainability means going beyond the concept of organic in wine making and

the strict Swedish regulations on toxic for viticulture. “More than organic” are the words

interviewees often used to describe what adopting sustainable practices in wine

production means to them and their business. All three vineyards work eagerly with a

state of mind of a non-toxic environment. For them, being sustainable means adopting a

series of measures, behaviours and practices that affect the entire supply chain in order to

create a product that is not “only organic” but also deeply respectful of the environment.

The sustainability development dimension refers to RQ2 and concerns how

first-generation family firm members integrate sustainability practices into their family

firms. This dimension includes two themes: experiencing sustainability and spreading

sustainability.

Experiencing sustainability refers to all practices specifically adopted by couples in all

business processes. It implies paying attention to the entire supply chain and integrating

sustainability practices from the start (Mirshnychenko & De Massis, 2022) by controlling

environmental impact (Aivazidou & Tsolakis, 2020) in the wine-making phase (Ahmad et

al., 2020) and packaging (Ferrara et al., 2020). They are all keeping their vineyards

completely clean by not using toxic spray, using plants rich in nitric between the

grapevine to assure regrowth, not using chemical fertiliser and refusing organic

certification as it allows, within certain limits, spraying which none of them use today.

Moreover, in one case, they also use light, big plastic bottles to transport wine to

restaurants and try in any way to cut down the carbon footprint (D´Ammaro et al., 2021).

Finally, concerning selling wine, some copreneurs feel that they have to choose between

export and sustainability. This is especially interesting for vineyards that produce bigger

amounts of wine than they can sell to restaurants and visitors on the vineyard. Due to the

strict Swedish regulation and alcohol monopoly, cellar door sales are not allowed. Despite

this, some copreneurs prefer avoiding wine exports because not only is it very complex

and expensive, but above all they believe that transporting wine around the world is not

sustainable from an environmental pollution point of view.

Spreading sustainability concerns all practices adopted by the respondents to promote

sustainability practices outside their family business and cooperate with others to develop

new sustainability practices. This can be considered in line with Clauß et al.’s (2022)

question regarding the extent to which family firms contribute to sustainable innovation.

To this regard, Frosarp spreads information about hormones, which has created an interest

among farmers, and, as a result, they have started paving the way for poison free

viticulture and agriculture. Along that line, Alnarp has contacted industries and discussed

ideas on inventions for capsuling and compressing carbon, which can be seen as

interactive innovation (Muñoz-Rojas, et al. 2022).

100

6. Conclusions, implications and limitations

Despite heterogeneity in running their family businesses, these couples have

something in common: doing something beautiful for themselves, nature and for coming

generations. Their love for nature pushes them in directions for a sustainable viticulture

that also have a spillover effect on agriculture. Their work and interest are bringing

something new to the Swedish landscape and also awareness of how to treat mother earth.

Not only are they forerunners for health, honesty and sustainability but they also bring

something fine to the table — wine.

Theoretically, this paper contributes to the wine sector research about the meaning of

sustainability (Flores, 2018; Maesano et al., 2022), the drivers for sustainability work

(Flores, 2018) and startup wineries in the cool climate wine sector. Furthermore, it adds to

family business research about sustainability practices in first-generation family firms

(Sharma, Sharma & Steiner, 2021) and copreneurial ventures (Sentuti et al., 2019) and to

understanding heterogeneity among families and family specific differences in family

firms (Chua et al., 2012; Daspit et al., 2021).

In practice, this paper contributes to how viticulture in Sweden can accelerate

sustainability practices in other branches in agri-business.

As the study moves forward to gather more narratives and deepen the analysis, this

paper should be considered a first step in the research. Limitations are related to the small

number of cases analysed and the need to reach theoretical saturation (Eisenhardt, 1989)

and deepen the analysis before results can be considered as definitive.

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How is circular entrepreneurship created? Insights

from a study on Italian entrepreneurs

Sofia Mauro2

Department of Human and Social Sciences

University of Naples “L’Orientale”

Largo S. Giovanni Maggiore, 30, Naples, Italy

smauro@unior.it

Alessandra De Chiara

Department of Human and Social Sciences

University of Naples “L’Orientale”

Largo S. Giovanni Maggiore, 30, Naples, Italy

adechiara@unior.it

Anna D’Auria

Department of Human and Social Sciences

University of Naples “L’Orientale”

Largo S. Giovanni Maggiore, 30, Naples, Italy

adauria@unior.it

Abstract

Circular economy (CE) can be considered as a new approach for the production and

consumption of goods, through the pursuit of social and environmental values, as well as

the achievement of economic profit. Although studies on CE are increasing in number,

the debate on circular entrepreneurship does not seem to be sufficiently exploited, as well

as studies on the profile of the promoters of innovative and circular ideas and on the

intra-organizational collaboration among founders. Therefore, the present paper intends to

contribute to reducing this gap through a literature review on the theoretical strands of

sustainable and circular entrepreneurship and through an empirical study based on 234

Italian circular organizations, and carried on through a qualitative approach adopting the

content analysis method.

The results highlight the presence of complementary skills in the ownership structure of

circular companies, with a prevalence of scientific skills. Indeed, it emerges that the

contamination and collaborative learning, that favours innovative initiatives, is based on a

continuous exchange of knowledge and technical skills and is favoured by a considerable

differentiation of academic and job knowledge.

2This paper was produced while attending the PhD programme in International Studies at the

University of Naples “L’Orientale”, Cycle XXXVII, with the support of a scholarship financed by

the Ministerial Decree no. 1061 of 10th August 2021, based on the PON-Research and Innovation

2014-2020, on Innovation and Green issues (Action IV.5).

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Finally, the present study provides future research trajectories and implications that will

be further deepened through an empirical analysis that involves professionals and key

informants.

Keywords – Circular economy, sustainable entrepreneurship, circular entrepreneurship,

Italian circular companies, skills, knowledge

Paper type – Academic Research Paper

1 Introduction

In recent years, the attention to sustainability issues is constantly growing, as it is the

pillar of the current global framework of the Agenda 2030 for sustainable development

(United Nations and General Assembly, 2015). According to sustainability definitions,

achieve the sustainable development means to integrate economic, social and

environmental goals, through innovation, ensuring the satisfaction of the primary needs

for present and future generations (WCED, 1987). Within the sustainability paradigm, an

essential role is played by the circular economy approach (Murray et al., 2017;

Geissdoerfer et al., 2017). The circular economy is an economic model that is clearly in

contrast with the current linear economy, now considered ineffective in facing problems

such as climate change and pollution, driven by an irrational usage of resources and a

strong negative impact on the natural environment in terms of environmental damages

and waste inefficient management. In fact, CE can be considered a new approach to the

production and consumption of goods, through the pursuit of social and environmental

values, as well as the achievement of economic profit. It relies on closing loops (Yong,

2007) through material recycling and reuse practices, to achieve a greater efficiency in

resource management (Klettner et al., 2014), and in the production, distribution, and

consumption processes (Manea et al., 2014). One of the main objectives of CE is to

transform waste into new resources, keeping products and materials at the maximum level

of utility and value over time (EC, 2015; Bocken et al., 2016), as well as reducing waste

production.

In this approach a key role is played by entrepreneurs that can take the opportunity

offered by the CE (Geissdoerfer et al., 2017). According to Schumpeter (1934),

“entrepreneur’s main function is to allocate existing resources to new uses and new

combinations” since “innovations are essential to explaining economic growth, and the

entrepreneur is the central innovator (…) that does not retreat from engaging in risky

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business ventures (…) His disposition to face risks makes him an entrepreneur” (Śledzik,

2013, p. 91). Hence, the context where the entrepreneur operate has a crucial value, since

very often entrepreneurs are inspired by it to identify new opportunities and, in line with

the sustainable approach, identify practices to employ natural resources efficiently and

with a low level of wastage (Dean and McMullen, 2007).

Although these issues are spreading rapidly, the debate on circular entrepreneurship

does not seem to be sufficiently exploited. Therefore, the present paper intends to

contribute to reducing this gap through a literature review on the theoretical strands of

sustainable and circular entrepreneurship and then through an empirical study based on

234 Italian circular enterprises.

In particular, the paper aims to study the sustainable businesses or, more properly,

circular businesses, analysing the profile of the promoters of innovative and circular ideas

and focusing on the combination, integration, and contamination of their skills and on the

intra-organizational collaboration. Intra-organizational collaboration (Huxham, 1993)

appears to be an interesting research perspective but still scarcely investigated, in contrast

to the external relations entertained by the enterprises (Pinelli et al., 2021), that is widely

investigated in the literature.

Thus, the core of this work is to understand entrepreneurship in the circular economy

in order to identify the characteristics and skills the sustainable entrepreneur should have.

In line with this, the work considers the following research question (RQ): Who are the

promoters of circular enterprises?

The paper is organized as follows. In section 2 we present the literature review on

sustainable and circular entrepreneurship, on the perspective of collaborative learning and

on the importance of sharing knowledge; in section 3 we describe the research process; in

section 4 we present the results; in section 5 we provide the implications of the study and

the conclusions.

2 Literature review

2.1 Circular business and entrepreneurship

The circular economy is an approach based on the so-called closed-loop production

systems (Ellen MacArthur Foundation, 2012; Murray et al., 2017), through the adoption

for innovative solutions that can partially repair the environmental damages due to the

linear production systems, and improve resource efficiency (Maglio et al., 2021).

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Enterprises adopting a sustainability vision play an active role in the circular

economy, as they can generate concrete responses to many social and environmental

concerns (Hall et al., 2010; Geissdoerfer et al., 2018) by embracing the "triple bottom

line" approach (Henry et al., 2019). Indeed, in line with the SDGs of the 2030 Agenda

(Preston and Lehne, 2017), they are responsible for implementing innovative strategies to

reduce and properly manage waste, reutilising materials and products, and to educate

consumers to a responsible consumption behavior and the use of ecological products

(Veleva and Bodkin, 2018).

Circular entrepreneurship is based on the circularity of ideas, knowledge and skills,

the aim of which is to create innovation through the design of goods and services needed

by people, promoting the incorporation of recyclable materials and minimising waste

production (Zucchella and Urban, 2019).

The debate on the circular businesses has analysed various issues concerning the

creation of these companies. Some scholars have underlined the key role played by

collaborations and the importance to adopt a responsible approach in using and managing

resources (Aaboen et al., 2017, Pagano et al., 2018). Others have underlined the

importance of social ties in the development of the innovative idea, which play a

significant role in facilitating the culture of circular economy (Dantas et al., 2022).

Very often, entrepreneur’s specific skills and competences, dictated by previous

studies and experience in certain fields, are needed to enable them to undertake a

successful circular initiative (Dantas et al, 2022). The debate also underlines the

importance of the complementarity of knowledge and skills of all the individuals within

the enterprise for the creation of new circular enterprises (Dodd et al., 2021), since it

favours the promotion of a flexible mentality, readiness for change, the implementation if

innovative solutions to take new opportunities (Trokić, 2016; Bailey et al., 2020; Triguero

et al., 2022).

With special reference to the sustainable entrepreneur, the debate underlines some

characteristics and motivations that characterize him/her, such as a strong sense of

environmental and social responsibility, strong links between environmental protection,

human dignity and market success, strong personal ambition and commitment, ability to

share knowledge, a spirit of adventure and innovation (Schaltegger and Wagner, 2011;

Welter et al., 2017; Sawe et al., 2021). The combination of these characteristics can

favour the generation of innovative products and services, also aiming at reducing the

environmental impacts and increase people quality of life (Schaltegger and Wagner,

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2011), in line with the definition provided by Masurel (2007), that describes the

sustainable entrepreneur as an individual focused on people, planet and profit (Zamfir et

al., 2017).

These characteristics can also be attributed to the so-called “circular entrepreneur” (Henry

et al., 2021). Indeed, the debate associate the circular entrepreneur to other forms of

sustainable entrepreneurship, such as: “organic entrepreneurship”, focused on health and

well-being; “green entrepreneurship”, mainly focused on the climate issues and

ecosystems; and “blue entrepreneurship” focused on clean water and marine life

(Crecente et al., 2021; Suchek et al., 2022). The above-mentioned approaches have some

common elements with the CE, in fact, according to them, "the components and materials

keep their value and are recycled, remanufactured or reabsorbed by the natural

environment" (Inigo and Block, 2019, p. 283).

Anyway, some scholars provided a distinction between the circular entrepreneur and the

social entrepreneur, defining the latter as an individual who seeks opportunities to

increase social wealth, through the creation of new businesses or the innovative

management of existing organizations, in order to promote the reinvestment of positive

outcomes in respective communities, groups and stakeholders (Zahra et al., 2009; Phillips

et al., 2015).

Alongside the studies that reveal the characteristics of the entrepreneur, others studies

underline the driving force of the entrepreneurial fabric for economic development at

local, regional and national levels (Ferreira et al., 2017; Iacobucci and Perugini, 2021;

Suchek et al., 2021), as well as the importance of the circular businesses as they play a

multiplier role for the implementation and diffusion of circular business models (De

Chiara, 2020).

2.2 Collaborative learning perspective in circular enterprises

According to the academic debate, the complementarity of individuals' knowledge and

skills is necessary to implement circular economy initiatives (Dodd et al., 2021). Starting

from this need, the perspective of collaborative learning is fundamental (Van Hoof and

Thiell, 2014), as it explains the advantages of the complementarity of knowledge. People

with different backgrounds, skills and knowledge influence each other in a positive way,

giving a strong boost to the company's innovative processes. The existence and

combination of a various forms of knowledge and skills within a company generates a

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positive effect on absorptive capacity (Van Hoof and Thiell, 2014) and on the firm's

ability to create value and generate innovation.

The concept of absorptive capacity has been extensively investigated; for example,

Zahra and George (2002) defined it as a set of routines and organizational processes

through which companies acquire, assimilate, transform, and exploit knowledge to

produce organizational capacity dynamics (Zahra and George, 2002).

Austin (2010) stated that the higher is the level of collaboration and the transfer of

tangible and intangible resources within the company, the greater is the innovative value

of its final product and service (Austin, 2010); other scholars highlighted the various

benefits that derive directly from the exchange of know-how between different

individuals who, through the establishment of forms of collaboration within the

organizational model, integrate their knowledge, favouring the processes of aggregation

and improving the competitiveness of the company (Cao and Zhang, 2011; Alguezaui and

Filieri, 2014).

The debate also highlighted the opportunities deriving from the contribution of

diversified knowledge, considered the result of the collaboration among different profiles

and backgrounds (Martínez-Pérez and García-Villaverde, 2019), and underlined that a

wide variety of knowledge, experiences and skills can fuel and promote the development

of knowledge in other fields (Fantoni et al., 2006), improving the exploitation of internal

knowledge (Quintana-Garcia and Benavides-Velasco, 2004) and making companies more

competitive (Marcelino-Jésus et al., 2020).

Regarding sustainable companies, given the strong innovative profile that characterize

them, it has been argued that internal collaboration and the integration of knowledge and

skills positively influence the creation of innovative processes (Schaltegger and Wagner,

2011). Clarke and Roome (1999) underlined the impact of the interaction between the

actors directly interested in the activities on sustainability practices. In this regard, a

particularly interesting contribution can be found in the study by De los Rios and

Charnley (2017), who identified a set of skills useful for defining sustainable production

strategies. Similarly, Charnley et al. (2011) highlighted that the transversality of skills and

knowledge is crucial in the development of circular economy practices. To sum up, the

generation of new or innovative ideas can be considered the lifeblood for firms, even

more for those that, like circular companies, base their core business on the proposal of

innovative products or services. Therefore, in these companies, the study of mixed

competences appears to be important, since the fundamental element within these

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companies appears to be the human capital, made up of different professional profiles,

experiences, cultures and values. This diversity in the ownership structure should be

considered as a specific area of research as it can explain the birth and success of circular

companies.

3 Methodology

The empirical analysis was carried on through a qualitative approach and adopting the

content analysis method (Krippendorff, 2012), namely a method based on the analysis of

reliable documents to detect the most relevant topics with the use of a software to ensure

the objectivity of the study.

The sample analysed is represented by 234 circular organizations located in Italy; data

related to the organisations have been collected over the period between January and

November 2022.

To collect secondary data, we considered the information provided by the companies

through the Italian Atlas of the Circular Economy platform, a continuously updated

digital platform that collects and reports on companies, associations and research

organisations and promotes circular economy and sustainable practices. In addition, we

considered the organisations official websites.

The analysis was performed through the software NVivo (Krippendorff, 2012), that is

one of the most adopted tools when performing this kind of investigation (Harwood and

Garry, 2003; Houghton et al., 2015). Due to the characteristics of the software, we

selected documents in one language (Italian) and with a similar length, to guarantee the

reliability of the analysis and avoid any bias. We collected and classified the information

detected through a set of variables concerning: i) the description of the ownership

structure; ii) the professional profiles of the partners promoting. Figure 1 illustrates the

survey elements.

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Figure 1: Structure survey elements

4 Results

The first phase of analysis shows that the companies we investigated give a

considerable importance to the description of their ownership structure. In fact, 80% of

the circular companies clearly describe the composition of the ownership team (figure 2).

More in detail, it emerges that members of the ownership team possess predominantly

mixed skills (42%), since belonging to different branches of knowledge (figure 3). The

combinations of knowledge and skills refer to the set of all three different types of

academic and job backgrounds previously described. However, it should be noted that,

within the "mixed skills" in most cases there is a strong predominance of the so-called

hard skills, namely scientific skills, often mixed with sectorial competences.

Furthermore, significant results are detected with reference to individuals with specific

sectorial competences (38%), i.e. individuals from the same sector, who, by pooling their

specific skills, are able to develop circular ideas. On the other hand, 17% of the

companies examined have only founding partners with highly scientific skills, such us

engineers, chemists, biologists, biotechnologists, etc.

Finally, a very low percentage is registered for economic and humanistic skills, namely

economists, jurists, sociologists, marketing and communication experts, etc...

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Figure 2 Description of the ownership

Figure 3 Profile of promoters of circular ideas

As concerns the composition of ownership structure, the results of the content analysis

show that the combination of competences and multidisciplinary visions is important for

circular organizations. Indeed, to point up this phenomenon, in the table below we list

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some quotes related to the relevance given to the combination of different academic and

job backgrounds (table 1).

Table 1: The importance of mixed skills in circular companies

Name of circular company

Sentences

Alisea

To transform ideas into commercial successes, it is

necessary to create a network of actors with

different knowledge and to open up to a new way of

working based on sharing, in order to regain

competitiveness on a global market.

Circularity

Circularity, thanks to its team of expert

professionals on sustainability and materials

engineering and to its network of qualified partners,

is able to accompany companies along the path of

integrating the circular economy within their

business model.

Krill design

Innovative startup born from the desire of a group

of sustainability, technology and design enthusiasts

to do something that would have a concrete impact

on (business) models that are not compatible with

sustainable development.

RiMaflow

The interaction between artisanal and industrial

activities and rural activities, with the aim of

overcoming the division between city and

countryside and between producer and consumer

across the board.

Mediterranea

Mediterranea is born at the beginning of 2018

thanks to the synergy between the Vincentian

Family, the Medihospes Social Cooperative, the

non-profit association Linaria and Margherita

Grasselli.

The Circle

Team of expert professionals on highly scientific,

economic and social issues.

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Isa

It was born with the support of the PIN regional

tender, from the dream of a group of women who

put together their values, experiences and resources

to establish themselves as a female artisan

company founded on: innovation, reuse, creativity

and relationship.

The strength of ISA is in the contamination of

creativity, techniques and materials: it combines

different skills and materials, traditional and

innovative craftsmanship.

Orange Fiber

Italian company made up of two women with two

very different curricula, one specialized in textiles,

especially textiles with innovative materials, and the

other a graduate in International Cooperation for

Development and in Communication.

R.ED.EL. Srl

Since 2014, the company has had a Research &

Development department with an organization

chart of experts, with the aim of developing new

solutions for improving company efficiency and

launching activities in the circular economy sector.

ScartOff

Designers, marketers and creatives have combined

their experiences and values to create this project.

Progeva

Progeva, the very name of the company contains

the common thread that has linked together

research, passion and the ability to do business,

under the common aegis of an essential

prerequisite: to love one's land and want to

preserve it, re-educate the prevention and

treatment of nature.

5 Discussion, implications and conclusions

The paper addresses an emerging issue, delving into the topic of circular

entrepreneurship focusing on the characteristics of the ownership team of a CE company.

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In particular, the focal point is represented by the circular entrepreneur, and the

knowledge possessed by the owners of a circular company, as well as the

intra-organizational exchanges among founders.

The results highlight the presence of complementary skills in the ownership structure

of circular companies, with a prevalence of scientific skills. Indeed, contamination and

collaborative learning is based on a continuous exchange of knowledge and technical

skills and is favoured by a considerable differentiation of academic and job knowledge.

The benefits related to the integration and combination of skills and abilities emerge

both in the literature and in empirical evidence, an aspect that, in general, characterizes

companies with a strong propensity for innovation, but which is also evident in circular

companies. This confirms that circular entrepreneurship is the result of processes of

connection of experts in different fields, where new ideas are fuelled by the exchange and

contamination of the different skills of the founders (Van Hoof and Thiell, 2014). Besides,

the combination of different competences and knowledge not only allows the creation of

innovative initiatives, but also favours the dissemination of knowledge and awareness of

the importance of adopting a responsible and sustainable approach, expanding the social

role of companies.

In addition, combining different perspectives and knowledge, owners manage to

innovate facing social and environmental challenges, by embracing the principles of

sustainable development. Indeed, the social role of circular companies can also be

detected in the fact that, as listed in some official reports and sector studies (Eldar, 2017;

Bauwens et al., 2020), there are many non-profit or hybrid companies that embrace the

circular approach. An important element is represented by the role played by non-profit

organizations and, in particular, by the relationships they are able to create and maintain

with other economic actors in the context of CE, implementing models of convergence

between profit and non-profit. However, studies on this aspect are still scarce - and most

of them are focused on the second-hand markets (Valor et al., 2022; Persson and Hinton,

2023), this highlights the importance of further investigating this aspect. Indeed, this

perspective appears to be an interesting context of investigation with reference to CE, in

contrast to the inter-collaborative approach widely investigated in literature.

Another interesting research trajectory that emerges concerns to the ability of circular

companies to transfer individual knowledge at the organizational level. In fact, in the

theoretical debate, multidisciplinary is considered as fundamental for the passage from

individual knowledge to the assimilation, transformation, and exploitation of knowledge

117

at the organizational level (Sun and Anderson 2008). This aspect should be deepened in

the future also for the important managerial implications deriving from it.

Alongside the theoretical implications highlighted, the study provides policy

implications, considering the important role that institutions have in directing the

transition towards the circular economy (Ellen MacArthur Foundation, 2015). For

example, in Italy, the recent institutionalization of the Minister of the Ecological

Transaction bodes well for the planning of specific policies for supporting the

reconversion of production and consumption models. The commitment of the

policymakers must be aimed primarily at supporting the training of human capital with

scientific-technological skills, in line with what emerged from the present study, namely

that many entrepreneurs have an educational background in STEM disciplines (science,

technology, engineering and mathematics). Investing in education appears to be an

essential condition for supporting the development of industrial processes based on

innovation, such as circular economy models, but at the same time it represents an

important premise for helping to improve the quality of life of people, reducing the

environmental impact of the industrial activities, as well as intervening on inclusion and

social cohesion.

Institutions must be prepared to support new entrepreneurs but also SMEs, to make

them able to face this challenge and take part to this process. It is believed that initiatives

to develop digital solutions that enable internal and external collaboration for innovation

are important. Spreading knowledge on digital platforms that make it possible to support,

accelerate and orchestrate the entire innovation process of companies, from the generation

of new ideas to their launch on the market, and to support open innovation processes, are

initiatives that represent an important challenge since the circular economic can provide

new employment opportunities and favour community wellbeing, ensuring the

improvement of the economic, environmental, and social performance.

In conclusion, the main limitation of the study is due to the adoption of secondary

data to perform the analysis. This allow us to a partial investigation that does not include

some intangible aspects that are scarcely investigated in literature and that need to be

furthered. In line with the above, our main contribution is to provide research trajectories,

mainly related to the role of policymakers and the role of the owners and founders in

terms of implementing innovative initiatives and adopting a CE approach.

The present study will be further exploited through on-field research following the

grounded theory (GT) approach, thanks to the involvement of entrepreneurs,

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professionals and key informants, with the main aim to observe intangible factors

affecting knowledge exchanges and intra-organizational collaboration and their

consequences.

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How does communication in SMEs change in the

digital era? Some insights from the entrepreneurial

perspective

Emanuela Conti

Department of Economy. Society and Politics (DESP)

University of Urbino “Carlo Bo”

Via Aurelio Saffi 2 – 61029 Urbino PU – Italy

E-mail: emanuela.conti@uniurb.it

Elisabetta Savelli

Department of Economy. Society and Politics (DESP)

University of Urbino “Carlo Bo”

Via Aurelio Saffi 2 – 61029 Urbino PU – Italy

E-mail: elisabetta.savelli@uniurb.it

Roberta Bocconcelli

Department of Economy. Society and Politics (DESP)

University of Urbino “Carlo Bo”

Via Aurelio Saffi 2 – 61029 Urbino PU – Italy

E-mail: roberta.bocconcelli@uniurb.it

Abstract

The aim of the paper is to present an empirical study that examines digital communication

in small and medium-sized enterprises (SMEs) from the entrepreneurial perspective. The

academic literature is mainly focused on digital transformation in large companies and

more research on communication in SMEs is required. An exploratory study was carried

out in 205 Italian manufacturing SMEs, using the questionnaire method to fill this gap.

Data analysis was conducted with descriptive statistics. The preliminary results show that

SMEs still do not exploit the benefits offered by digital communication as the adoption of

digital communication tools and the level of marketing and communication skills are still

very low although some little gaps by company size (small and medium) and type (B2C

and B2B) emerge. The value of our paper can be traced to the broad perspective adopted

to investigate digital communication, including the analysis of the digital communication

mix, social media areas and scopes, and digital skills in SMEs, by company size and type.

Keywords – Digitalization, Communication skills, Entrepreneurship, SMEs

Paper type – Academic Research Paper

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1 Introduction

The digital revolution has radically changed marketing and communication activity

(Bala and Verma, 2018; Kolter et al., 2021). New services, touchpoints, and

communication instruments through which customers interact are increasing and new

digital marketing skills and professionals have grown exponentially (Pagani and Parco,

2017; Cham et al., 2022). Within this context, SMEs struggle to invest in digital

marketing and communication because of structural and cultural limits (Dethine et al.,

2020).

The entrepreneurship literature has mostly analyzed the obstacles and facilitating

factors to the digitalization of SMEs (Kergroach, 2020). Empirical research on digital

transformation is more extensively focused on large companies and further research on

SMEs is required (Raimo et al., 2021).

While large companies are fully seizing the opportunities and challenges of

digitalization, SMEs lack managerial vision and resources to fully understand the impact

of digitalization and start adopting it properly (Moeuf et al., 2018).Although the recent

pandemic crisis and geopolitical upheavals (Pencarelli et al., 2020) have forced

companies to use digital tools, SMEs risk not being able to take advantage of all the

potentialities of going digital compared to larger enterprises also because they are often

still poorly connected to high-speed broadband internet and have a lesser chance of fully

exploiting cloud computing for data archiving and processing (Pencarelli, 2022).

The impact of the digital revolution on the communication strategy of SMEs has

received little attention, and the academic investigation on the digitalization of marketing

activities refers mainly to large companies (Caliskan et al., 2021; Rosario and Dias,

2022). However, as SMEs contribute heavily to the world economy and consumers are

spending increasing time online, it is important to understand better how SMEs approach

and use digital marketing and communication.

The aim of this research is to contribute to filling this gap, by describing how

communication is changing in SMEs. In particular, this paper aims to answer to the

following research questions: (RQ1) Which digital communication mix do SMEs adopt?

(RQ2) What digital skills are required to improve marketing communication?

Specifically, we investigated the digital communication mix with a focus on social

media and the digital communication skills adopted and needed by SMEs, trying to

understand the existence of any differences between company size (small and medium)

and types (B2B and B2C). It is our aim, therefore, to expand the research on the current

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and required adoption of digital communication tools and skills, in order to understand

the actual and required approach to digital communication and marketing strategy.

To answer the research questions a survey on manufacturing SMEs of the Italian

Marche region was carried out. Italy is a country characterized by a very high presence of

SMEs and Internet and social media users. Data analysis is in progress and we present the

preliminary results of descriptive statistics.

The paper is structured as follows: the first section reports the theoretical background

on digital marketing and communication strategy and skills, with reference to SMEs. The

methodology is stated in the third section. Then, the analysis of the results is presented.

The last part discusses the findings and presents the conclusions, highlighting the

theoretical contribution of the study, managerial implications, and future research

directions.

2 Theoretical background

2.1. Digital communication and social media

Marketing literature has investigated digital marketing from different perspectives:

themes and trends in the sector (Rosario et al., 2021), the impact of Industry 4.0 (Sunday

and Vera, 2018), of artificial intelligence, augmented reality, IoT, and robotics on

marketing practices (Kotler et al., 2021).

Further studies have investigated specific aspects, including the impacts of

digitalization on marketing mix theory (Caliskan et al., 2021), the relationship between

supply chain management and marketing integration (Ardito et al., 2019), and the

transformation of the organizational aspects of the marketing function (Vassileva, 2017).

According to Chaffey and Ellis-Chadwick (2019, p. 10), digital marketing may be

defined as follows: “Achieving marketing objectives through applying digital media, data,

and technology”. In a similar vein, Bala and Verma (2018, p. 323) proposed the following

definition: “Digital marketing is the use of technologies to help marketing activities in

order to improve customer knowledge by matching their needs”.

All marketing activities (Sunday and Vera, 2018); Kotler et al., 2021) from

informative ones (e.g., analysis of customers and competitors) to strategic ones (market

segmentation and brand positioning), as well as marketing tools (Caliskan et al., 2021)

have been impacted by digitalization.

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Among marketing policies, communication has been strongly impacted by

digitalization (Cham et al., 2021; Kotler et al., 2021; Rosário and Dias, 2022).

In the digital context, communication can be managed more effectively as messages

can be created for very specific targets and there are numerous new digital

communication instruments to relate with consumers (Kotler et al., 2021). Artificial

intelligence (AI), machine learning, augmented reality, IoT, and robotics strongly affect

communication. These technologies allow market-driven approaches that involve the

acquisition of accurate and timely information on customers, markets, and products

(Rosário and Dias, 2022). Then, big data analysis with AI and machine learning (Ardito

et al., 2019a) allows to manage segmentation and targeting activities more effectively,

discover patterns, and gives insightful inputs based on customer needs and expectations

(Kagermann, 2015). All company types (B2B and B2C) can quickly understand

customers’ needs, predict their behaviors and respond to their desires (Ardito et al., 2019).

Contemporary internet-based communication allows consumers to connect instantly

with businesses, share feedback and opinions on a product or brand and be directly

involved in developing marketing strategies (Cham et al., 2021; Rosario et al., 2022).

Marketers can use many online communication instruments to offer users a total

digital experience, such as websites, mobile apps, communication techniques, including

search engine marketing, online public relations, online partnerships (e.g., affiliate

marketing and co-marketing), online display advertising, email marketing (Cham et al.,

2022; Rosario et al., 2022) and social media marketing (Tuten and Solomon, 2018).

Hence, digital communication contributes to develop a strong customer relationship and

brand image (Chaffey and Ellis-Chadwick, 2019).

Within marketing automation, content automation is considered one of the marketing

activities with the greatest commercial impact (Bala and Verma, 2018). In fact, it is

possible to personalize communication for each customer and develop promotional

activities for them (Başyazicioğlu and Karamustafa, 2018). Through marketing data

analysis tools (e.g., Google Analytics), marketers can optimize marketing campaigns and

reduce the costs of promotional activities (Cham et al., 2022).

Social media (social network, podcast, forum., wiki, virtual words, blog, etc) are part

of the more general digital marketing communication tool which include web site,

corporate blog, search engine, e-mail, mobile (Tuten and Solomon, 2018). Social media

deserves a specific focus as time spent by consumers on these platforms is constantly

increasing. In 2022, Internet users were 64.4 % of world population (+1.9% on 2021),

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unique mobile users were 68.0% (+3.2% on 2021) and active social media users were

59.4% (+ 3.0% on 2021).

The marketing literature has provided different definitions and classifications of social

media and definitions of social media marketing. For example, Kaplan and Helein (2019)

consider social media as platforms on which people build networks and share information

and/or sentiments. Tuten and Solomon (2018) affirm that social media are “the online

means of communication, conveyance, collaboration, and cultivation among

interconnected and interdependent networks of people, communities, and organizations

enhanced by technological capabilities and mobility”. Similarly, Peters et al. (2013, p.

281) focussed on their distinctive nature of being “dynamic, interconnected, egalitarian,

and interactive organisms” social media have generated three fundamental changes in the

market (Li et al., 2020): 1) social media enable firms and customers to connect in ways

that were not possible in the past; 2) social media have transformed the way firms and

customers interact and influence each other. Social interaction involves “actions” (e.g.

word of mouth); 3) they allow companies to better manage customer relationships and

enhance decision making in business.

Social media can be grouped in four areas (Tuten and Solomon, 2018): social

community, social publishing, social entertainment, and social commerce. Further, they

can be used to different objectives by firms (Li et al., 2020): promote and sell, connect

and collaborate, listen and learn, empower and engage.The Authors define social media

marketing strategy (SMMS) as “an organization’s integrated pattern of activities that,

based on a careful assessment of customers’ motivations for brand-related social media

use and the undertaking of deliberate engagement initiatives, transform social media

connectedness (networks) and interactions (influences) into valuable strategic means to

achieve desirable marketing outcomes”. Therefore, SMMSs may differ depending on the

firm’s strategic objectives, social media engagement initiatives, and consumers

motivations and behaviours (Venkatesan, 2017), as well as the different degrees of

interactivity and interconnectedness in yielding sound marketing outcomes (Harmeling et

al., 2017). Futher, firm benefit from such customer engagement in both tangible (e.g.,

higher revenues, market share, profits) and intangible (e.g., feedbacks or new ideas that

help to product/service development) ways (Pansari and Kumar, 2017).

Among new technologies, social media are particularly interesting to investigate since

they can be more easily adopted by smaller firms, even those located in lagging areas

(Aronica et al., 2021). According to the Authors, their usage could even stimulate

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economic convergence, or at least mitigate divergence, between core business and lagging

regions.

Recent literature shows that social media can play a strategic role also in B2B

contexts (Lamberton and Stephen, 2016; Bocconcelli et al., 2017) and that sales people

increasingly use social media in their work (Itani et al., 2017; Lacoste, 2016). For

example, Fraccastoro et al. (2020) investigated the importance of the integrated use of

social media digital, and traditional communication tools in the B2B sales process of

international SMEs stressing that digital communication tools seem to be most prevalent

in the persuasion phase, whereas more traditional communication tools still prevail in

customer relationship management.

2.2 Studies on digital communication and skills of Italian SMEs

To investigate digital communication and social media, qualitative analyses and pilot

studies have been adopted, while a lack of quantitative studies is observed (Aronica et al.,

2021). Further, most of the studies on digital communication tools and social media refer

to large companies.

A study on a sample of Italian SMEs (Cesaroni and Consoli, 2015) shows that,

although social media are quite common among small businesses. they are not always

able to use these tools in a truly profitable way. Social media are often introduced because

they are "fashionable", because companies feel "forced" to use them. as "all competitors

do it". However, there are different situations and an entrepreneur mentality makes the

difference.

A recent study on the digitalization of Italian companies (Bettiol et al., 2017) have

stressed that marketing is one of the most impacted business functions, both in large and

small companies and that it is a strategic function for the digitalization of the whole

organization.

An empirical investigation on a large sample of firms and specifically focusing on the

lagging regions of Italy, namely, the southern regions (Aronica et al., 2021) indicates that

smaller firms in lagging areas are more likely to adopt social media but at the same time

less likely to use them at a professional level. This reflects poor strategic targets of social

media adoption and lower probabilities of entering international markets.

A recent survey carried out by Italiaonline in 2021 stressed that the investments in

digitalization of a representative sample of about ten thousand Italian SMEs has increased

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by 22% with respect to 2020. The 73% of the sample have a website, 12% have an

e-commerce around 200.000 companies have carried out online communication and

advertising campaigns on search engines. Further, 49.9% of the sample use social media.

in particular Facebook (94.6%) and Instagram (44.8%). In 2021, in particular, both the

number of companies that made investments in digital increased, equal to 1.2 million

units (+7.5%). and the average investment per company, which reached 2.3 thousand

euros (+13%). The study shows the consolidation of digital communication compared to

traditional media: in comparison. the growth of the market of traditional means of

communication (e.g. TV, Radio, press, billboards, fairs, etc.) is still significantly lower

than the pre-pandemic values of 2019. It is important to underline that the overthrow of

digital communication investment in traditional ones took place in 2020. However, the

use, even commercial, of communities is more exploited by medium/large companies

which rely on social interactions for 55.2% and 59.9% respectively. Influencer marketing

strongly increased (+50% in terms of investments compared to 2020) and while initially it

was considered the prerogative of medium-large companies, now it is increasingly used

by small businesses too. Technology together with strategy can give business answers

already in the short term even without large investments and with few resources.

However, this study underlines the lack of competencies to use these new tools.

The demand for digitally competent personnel in marketing and communication has

increased with the digital revolution and the new ICT (Kotler et al., 2021; Sassoon, 2022).

The role of managers and employees is widely recognized as central to the successful

adoption of digital technologies by SMEs and studies have shown the importance of

(senior) managerial commitment and support (Ko et al., 2021). Indeed, managers and

employees need to develop digital skills, together with the use of digital tools, to

collectively develop a digital capability in SMEs (Proksch et al., 2021) and remain

competitive (Ko et al., 2021).

Thus, one relevant digital revolution’s implication is the need for new skills and

professionals. The academic (Gregori and Pascucci, 2018) and practitioner literature

(Cantamaesse and Ferrero, 2022) identified many new professionals in digital marketing

and communication such as digital content manager, social media manager, SEO

manager, Web analyst, e-commerce manager, digital PR, data scientist and community

manager.

Recent studies on the impact of digital transformation on human resources are focused

on large companies (Conte and Siano, 2023). However, personnel in small and medium

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firms (SMEs) have a much lower likelihood to participate in adult learning activities than

workers in large firms. According to the OECD Survey of Training in SMEs (2022) - that

reviews initiative in Italy that can expand the up- and re-skilling efforts of SMEs to

accompany their digital and green transition - three out of four Italian SMEs trained their

workers informally in 2018-19, while only 46% offered a formal or non-formal training

activity. Furthermore, the share of firms offering more structured forms of training is

increasing in size, with 61% of medium firms offering it in 2018-19, as opposed to 38%

of micro firms. Three main barriers prevent SMEs from investing further in their

workforce’s skills: the lack of a learning culture in these firms, their relative inability to

identify skill gaps and attract appropriately qualified workers, and the high sensitivity to

the cost of training.

3 Methodology

To answer the research questions, a quantitative study based on a structured

questionnaire was conducted with the entrepreneur of a selected sample of Italian SMEs.

Based on the concepts and models of the digital revolution in marketing and

communication identified in the literature, a questionnaire was designed. The research

questionnaire used for the survey, which was administered guaranteeing the anonymity of

the respondents, consists of 15 questions (multiple choices and with a 7-point Likert

scale, dichotomous questions and one open question) divided into three parts.

The first part of the questionnaire contains questions to identify the company profile:

company type (B2B and B2C) company size (small and medium), sector (metal, furniture,

leather, textile and clothing, food, wood and cork, etc.), and revenues (five discrete

categories calculated in millions of euros: < 1, 1–4, 5–9.9, 10–49.9, > 50).

The second part is aimed at identifying the new digital communication tools and

online metrics adopted by companies. In particular, questions were related to identify the

composition of the digital communication mix and the major social media areas adopted

the main scopes of using social media platforms. The following digital communication

mix was adopted (Gregori and Pascucci, 2018): corporate website, corporate blog, social

media, email marketing, display advertising, google advertising, paid advertising on

social media and chatbot.

Furthermore, the classification of social media proposed by Tuten and Solomon

(2018) was adopted: social community, social content, social entertainment, and social

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commerce. the scopes of social media were taken by Li et al. (2020): to promote and sell,

to connect and collaborate, to listen and learn, to empower and engage. A list of the most

commonly used online metrics was also taken from the marketing literature (Gregori and

Pascucci, 2018): like, share, comments, number of fans, engagement, website visits,

average time spend on web site, Cost through rate (CTR), cost per click (CPC), and

conversion rate.

The third part of the research questionnaire consists of questions aimed at identifying

the current and desired level of digital skills. One question refers to the evaluation on a

1-7 Likert scale of the current digital marketing and communication skills and the skills

they need to develop to compete in a digital context. Furthermore, respondents were

asked to indicate the most important digital professionals for the company. In particular, a

list of new digital professionals was taken from the literature (Cantamesse and Ferrero,

2022) and respondents were asked to select maximum three options among digital content

manager, social media manager, SEO manager, Web analyst, e-commerce manager,

digital PR, data scientist and community manager. An open-ended question is aimed at

identifying the level of investment in digital communication, measured as the percentage

of digital communication budget on the total communication budget. In the last question,

respondents were asked to indicate whether a data-driven marketing approach is used.

The sample is made up of 205 manufacturing companies from the Marche region and

is stratified by company size and province. It was extracted from the iCribis database of

July 2021. Data was called in August and September 2021. The survey process was

web-based and descriptive statistics were performed.

4 Results

4.1 Sample characteristics

The sample is made up of 205 manufacturing companies from the Marche region and

is stratified by company size and by provinces. Table 1 shows the distribution of

companies by type (B2C and B2B), size and sector. The sample reflects quite well the

distribution of the overall manufacturing companies in the Marche region since the

universe/sample variations are almost irrelevant. It is made up of 62% B2B companies,

38% B2C companies. Most of the companies are small (61%) and among medium-sized

companies (39%), the companies with 51-100 employees prevail (27%) followed by

companies with 101-200 employees (10%) while the largest companies with 201-249

131

employees are very scant (2%). Companies that manufacture metal products (16%),

leather and similar articles (11%), textile and clothing (9%) wood and cork (8%) prevail,

followed by companies of the following sectors: rubber and plastic (7%), mineral (7%),

food (7%) furniture (6%) computer and electrotechnics (5%) and electronics (5%).

Table 1: Sample descriptive statistics

Company Type

B2B

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B2C

Company Size

Small (11-50 employees)

126

Medium (51-250 employees)

Sector

Metal

Leather

Textile and clothing

Wood and cork

Rubber and plastic

Minerals

Food

Furniture

Computer and electronics

Electrical appliances

Other

Revenue (million euros)

< 1

1 - 4.9

5 - 9.9

10 - 49.9

> 50

N=205

4.2 Digital communication mix, social media and metrics

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The respondents of the sample show that the digital communication mix (tab. 2) is

still scant (the average value is 2.72 on a 1-7 Likert scale). Table 18 shows that the main

digital communication tools is email marketing (6.09), followed by the corporate website

(4.49), whatsapp (3.75) Facebook (3) LinkedIn (2.81) and Instagram (2.67). Despite the

fact that e-mail is widely used, there is a very low use of e-mail marketing software

(2.39), especially by small companies. Among the other suggested communication tools,

four companies indicated virtual fairs and events, Google ads, Google News and direct

contact. Medium companies use more digital tools on average (3.01) than small

companies (2.55).

In particular, medium companies use much more paid advertising on social media

(3.04), google ads (2.76) and LinkedIn than small companies, while small companies use

WhatsApp (Var. -1.03) more than medium ones. B2C companies use on average slightly

more digital communication tools (3.13) to communicate with customers than BtoB

companies (2.62). As expected, B2B companies use more paid adv on social media,

google ads, display advertising (e.g. banner) and Linked and e-mail than B2C companies

which use much more Facebook and Instagram.

Table 2: The digital communication mix

Digital

communication

tools

Company size

Company type

SMEs

Small

Medium

Var.

B2B

B2C

Var.

Corporate website

4.49

4.18

4.99

0.81

4.43

4.60

0.17

Corporate Blog

1.70

1.67

1.76

0.09

1.57

1.92

0.35

Youtube

2.01

1.76

2.41

0.65

1.97

2.08

0.11

Facebook

3.00

2.77

3.37

0.6

2.60

3.65

1.05

Instagram

2.67

2.39

3.11

0.72

2.31

3.24

0.93

2.81

2.45

3.39

0.94

3.00

2.51

-0.49

E-mail

6.09

6.07

6.13

0.06

6.24

5.85

-0.39

3.75

4.14

3.11

-1.03

3.77

3.71

-0.06

Chatbot and/or AI

tools

1.31

1.21

1.46

0.25

1.19

1.50

0.03

Google advertising

2.40

2.17

2.76

0.59

2.20

3.09

0.89

Paid adv on social

media

2.53

2.21

3.04

0.83

2.26

4.56

2.3

Display advertising

2.02

1.70

2.54

0.84

31.81

2.91

1.1

PR and online

events

2.06

1.77

2.52

0.75

2.08

2.71

0.63

Other

1.30

1.19

1.48

0.28

1.20

1.46

0.26

Mean

2.72

2.55

3.01

0.46

2.62

3.13

0.49

133

Similarly, the level of adoption of software to digitally manage customer’s

relationship is scant. Medium-sized companies use more CRM for marketing and sale,

marketing automation and email marketing software than small companies, while B2C

use more marketing automation, but, both B2B and B2C companies use CRM and email

marketing software in a similar way.

Table 3: Software adopted to digitally manage customers

Software

Company size

Company type

SMEs

Small

Medium

Var.

B2B

B2C

Var.

CRM

2.38

1.94

3.06

1.12

2.39

2.36

-0.03

Marketing

automation

1.99

1.80

2.28

0.48

1.72

2.65

0.93

Email marketing

software

2.39

2.02

2.99

0.97

2.23

2.65

0.42

Mean

1.69

1.44

2.08

0.64

1.59

1.92

0.33

The use of social media is quite scant as the average value is mostly under three on a

1-7 Likert scale (table 4). As expected, the most used areas of social media are a social

community (2.84) and social publishing (2.72). with a considerable gap between medium

and small companies. and between B2C and B2B companies where the former makes

greater use of them. Social commerce is underutilized (1.78) but B2C companies use it

mostly (2.35). The use of social entertainment (1.76) is very low even in medium-sized

enterprises. The data suggests that there is still ample room for improvement by local

SMEs in exploiting the potential of social media in all four dimensions. Owning or using

them does not guarantee that social media are also well used in the processes of value

creation and co-creation.

Table 4: The four areas of social media (average value 1-7 Likert scale)

Social media area

Company size

Company type

SMEs

Small

Medium

Var.

B2B

B2C

Var.

Social community

2.84

2.52

3.35

0.83

2.57

3.28

0.71

Social publishing

2.72

2.47

3.11

0.59

2.55

2.99

0.44

Social

entertainment

1.53

1.38

1.76

0.38

1.48

1.69

0.21

Social commerce

1.78

1.65

1.97

0.32

1.43

2.35

0.92

134

Mean

2.22

2.01

2.55

0.53

2.01

2.58

0.57

Social media (tab. 5) are mainly used to “connect and collaborate” (4) especially by

medium-sized (4.38) and B2C (3.09) firms and less to “promote and sell” (2.71) and to

“listen and learn” (2.60). They are used even less to “empower and engage”, that is to

involve customers in projects (2.25), especially by small businesses (2.15) and B2B

companies (1.71). Therefore, communication (to connect and collaborate) represents the

most advanced form of use of social media of the SMEs analysed.

Table 5:Scope of social media

Online metrics are still poorly adopted (tab. 6) by SMEs (28.82%), especially by

small companies (23.45%). The most popular metric is website visits (56.59%) followed

by like (37.07%), number of fans (32.20%), comments, share and average time spent on

website (37.71%). The Click Through Rate (CTR) (30.24&), and the engagement rate per

post 27.80% are also used by three out of ten companies. Again, medium companies

(37.40%) use more metrics than small companies (23.45%). Similarly, B2C companies

(37.67%) adopt metrics more than B2B companies (24.27%). In particular, the former use

more the number of fans, like, abandoned carts, and time on website and conversion rate

metrics than the latter.

Table 6: Level of adoption of online metrics (%)

135

Social media scope

Company size

Company type

SMEs

Small

Medium

Var.

B2B

B2C

Var.

To promote and sell

2.71

2.58

2.91

0.33

2.04

3.09

1.05

To connect and

collaborate

4.00

3.76

4.38

0.62

2.93

4.56

1.63

To listen and learn

2.60

2.43

2.89

0.46

2.06

2.91

0.85

To empower and

engage

2.25

2.15

2.42

0.27

1.71

2.47

1.03

Mean

2.89

2.73

3.15

0.42

2.19

3.26

1.14

Metric

Company size

Company type

SMEs

Small

Medium

Var.

B2B

B2C

Var.

37.07

25.40

55.70

30.30

30.71

47.44

16.73

31.71

26.98

39.24

12.26

25.98

39.74

13.76

Comments

31.71

26.98

39.24

12.26

31.50

44.87

13.38

Number of fans

32.20

24.60

44.30

19.70

23.62

44.87

21.25

4.3 Marketing and communication personnel and new digital skills

The manufacturing companies of the sample adopt mostly both internal and external

(tab. 7) marketing and communication skills (47.3%) followed by internal personnel

(43.9%). Small companies show a slightly higher level of internal marketing skills than

medium companies, while B2B companies use more internal skills (47.24%) than B2C

companies (38.46%). B2C companies use the highest level of external professionals in

communication and marketing (10.26%).

Table 7: Marketing and communication personnel (%)

In the entrepreneur’s perspective the most important professionals digital marketing

and communication (tab. 8) in their business are digital content manager (46.3%), social

media manager (42.4%) and SEO manager (34.6%). Social media manager is much more

important for B2C companies (55.13%) than B2B context, and for medium companies

(54.4%) than small ones. Furthermore, e-commerce is much more important for B2C

companies than B2B companies, as well as web analyst and community manager.

Table 8: The most important digital marketing and communication professionals

136

Engagement

27.80

23.02

35.44

12.43

25.20

33.33

8.14

Website visits

56.59

49.21

68.35

19.15

55.12

58.97

3.86

Time on web site

31.71

24.60

43.04

18.43

25.98

41.03

15.04

CTR

30.24

25.40

37.97

12.58

24.41

38.46

14.05

Cost per click

17.07

13.49

22.78

9.29

13.39

24.36

10.97

Conversion rate

14.15

13.49

15.19

1.70

8.66

23.08

14.42

Abandoned carts

6.83

4.76

10.13

5.36

2.36

17.95

15.59

Mean

28.82

23.45

37.40

13.95

24.27

37.65

13.38

Marketing and

communication personnel

SMEs

Small

Medium

B2B

B2C

Internal

43.9

34.2

47.24

38.46

External

8.8

8.7

8.9

3.94

10.26

Both internal and external

47.3

41.3

48.82

51.28

Total

100

Professionals in

digital marketing

and communication

Company type

Small

Medium

Var.

SMEs

B2B

B2C

Var.

Digital content

manager

40.6

54.4

13.8

46.3

49.61

41.03

-8.58

Focussing on digital marketing and communication skills, the study reveals that all the

respondents affirm that the current digital skills (2.96) and the digital skills companies

need to develop (3.32), as well as current training costs (2.85) are very low, on a 1-7

Likert scale.

Table 9: Digital marketing and communication skills (1-7 Likert scale)

Company size and

type

Current skills

Skills to develop

Training costs

Small SMEs

2.96

3.32

2.85

Medium

3.56

3.94

3.52

SMEs

3.19

3.56

3.11

B2B

3.00

3.31

2.87

B2C

3.49

3.95

3.49

Furthermore, the investment in digital communication, measured by the percentage of

the digital communication budget on the total communication budget, (tab. 10) is still low

in SMEs (26.57%), especially in small (15.44%) and B2B (16.24%) enterprises.

Table 10: Digital communication budget

Company size and type

Digital communication budget (%)

Small

15.44

Medium

26.57

SMEs

19.73

B2B

16.24

B2C

26.44

Consistently, table 11 shows a scant use of data to develop marketing and

communication strategies. Indeed, all the companies seem not to use sufficiently big data

to take decisions and are not aware of the importance of adopt data-driven marketing in

the near future, except for medium-sized companies (4.29).

137

Social media

manager

34.4

54.4

42.4

34.65

55.13

20.48

SEO manager

32.5

38.0

5.5

34.6

33.86

35.90

2.04

Web analyst

14.3

13.9

-0.4

14.1

13.39

19.23

5.84

E-commerce

manager

14.3

17.7

3.4

15.6

10.24

24.36

14.12

Digital PR

11.9

12.7

0.8

12.2

10.24

15.38

5.14

Data scientist

6.3

13.9

7.3

9.3

11.02

6.41

-4.2

Community

manager

5.6

5.1

-0.5

5.4

3.94

7.69

5.14

Table 11: Data-driven marketing approach

Company size and type

Current use of data

Importance to use data

SMEs

3.40

3.45

Small

3.06

2.92

Medium

3.92

4.29

B2B

3.37

B2C

3.43

3.57

5 Discussion and conclusions

The aims of this paper were to understand how manufacturing small and

medium-sized companies communicate in a digitalized business environment and which

digital skills are adopting. As the academic and practitioner literature are mainly focused

on digital transformation of large firms, this study investigated digital communication

strategy and skills in small and medium-sized companies, identifying gaps between B2C

and B2B contexts.

Three main results answer the research questions. First, the level of adoption of digital

communication in SMEs is generally very low (2.72 in a 1-7 Liker scale). This result, in

line with the previous literature (among others, Dethine et al., 2020; Cesaroni and

Consoli, 2015; Caliskan et al., 2021), can be explained by the fact that the structural limits

of SMEs, especially the lack of financial resources and poor managerial and digital

culture can prevent them from exploiting the opportunities of digital transformation.

Second, medium sized firms adopt a slightly higher level of digital communication

mix than medium-sized firms, as well as B2C firms with respect to B2B firms. On the one

hand, this result confirms that medium-sized firms have more resources and culture in

comparison to small firms and can better face the challenges and seize the opportunities

of digital transformation. Therefore, most likely, medium-sized companies could adopt a

more strategic approach to digital marketing and communication. On the other hand, this

result shows that communication in B2B firms is increasingly digital.

Among digital communication channels, B2C companies are mainly adopting the

major social media platforms. Only LinkedIn is more popular in B2B context. All

respondents state that the main purpose of social media, especially social networks, is “to

connect and collaborate”. This means that main purpose is still the basic one, which is to

communicate. More demanding and ambitious goals suggested in the literature (Tuten and

Solomon, 2018; Li et al., 2021), such as “to empower and engage”, which require a strong

138

commitment and an active role of the company, are the least adopted among the

companies in our sample. Furthermore, this result indicates that small enterprises may

adopt social media but are less likely to use them with a clear strategy. Hence, this result

is in line with the main literature (Aronica et al. 2021; Fraccastoro et al., 2020).

Furthermore, the average values of the use of metrics, the percentage of the digital

communication budget on the total communication budget and the use of data to develop

a data-driven strategy are very low.

Third, the actual level of digital communication and marketing skills is very low

(2.96) compared to the skills needed in a digitalized environment. In the entrepreneur’s

perspective, the digital skills required (3.32) and the actual training costs (2.85) are also

very low. Therefore, respondents underestimate the importance of properly developing

new skills. This result may be interpreted with the structural limitations of SMEs and the

low awareness of management of the benefits associated with the digital transition (Ko et

al., 2022; Conte and Siano, 2023; OECD report, 2022).

The main preliminary theoretical contribution of the study consists in the attempt to

take a broad perspective on the topic, since we investigated the digital communication

strategy of SMEs both in terms of the digital communication mix adopted - with a focus

on social media - online metrics, budget and digital communication skills and by size and

type.

The small size of the sample and the geographic origin of companies imply limited

generalizability and further research on the topic is recommended.

This study has several preliminary managerial implications. The results suggest that

entrepreneurs and their collaborators should be more aware of the importance of investing

in digital communication and developing marketing and communication skills. Italian

companies are very good at manufacturing “beautiful and well-made” products, but they

should learn more to effectively communicate their offer. This means that SMEs should

be open to cooperate with new digital marketing professionals, especially digital natives.

Furthermore, some institutional implications are provided. Policymakers could provide

financial resources, training and advice in digital communication to help the digital

transformation process of SMEs. Universities could help to increase awareness and

knowledge of digital marketing and communication and develop appropriate skills

through ad hoc training programs with entrrpreneurs.

The research is in progress and futher analysis will include Anova analysis of variance

and cluster analysis in order respectively to calculate the significativity of differences of

139

means between groups and to create clusters of companies with similar digital

communication strategies and skills.

Due to its exploratory design, future studies should focus on both qualitative research,

such as case studies, in order to gain a deep understanding of the most successful

communication strategies, and quantitative research (e.g. with a longitudinal design).

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142

Crisis Management in SMEs: an empirical analysis in

the Marche region

Elisabetta Savelli

Department of Economics, Society, Politics

University of Urbino Carlo Bo

Via A. Saffi, 42 - 61029 Urbino (PU) - Italy

E-mail: elisabetta.savelli@uniurb.it

Federica Murmura

Department of Economics, Society, Politics

University of Urbino Carlo Bo

Via A. Saffi, 42 - 61029 Urbino (PU) - Italy

E-mail: federica.murmura@uniurb.it

Giada Pierli

PhD Student in Global Studies. Economy, Society and Law

University of Urbino Carlo Bo

Via A. Saffi, 42 - 61029 Urbino (PU) - Italy

E-mail: g.pierli@campus.uniurb.it

Abstract

Objectives: Due to the continuous and rapid changes in economic, political and social

scenarios, the centrality of the crisis and its management in the life path of enterprises has

been increasingly recognised. In this perspective, the study aims to analyse how the

discipline of crisis management can be applied to the context of Italian small and

medium-sized enterprises (SMEs), with particular focus on those operating in the Marche

region.

Literature review/Theoretical Framework: Crisis management is understood as an

ongoing process that develops within the company and makes it aware of its vulnerability

to certain negative events, thus supporting it to deal with them effectively (Khodarahmi,

2009). The continuous unexpected and traumatic events have made crisis management

indispensable for the long-term survival of companies, especially small and medium-sized

ones. In Italy, 160,000 companies fit into the European definition of small and

medium-sized and generate a total added value of EUR 204 billion (Rapporto regionale

PMI, 2022). In the Marche region, SMEs account for 99.9% of the regional industrial

fabric (Le imprese nella regione Marche, 2020).

Approach/Method: A quantitative analysis was developed by means of a survey

questionnaire, carried out through computer-assisted web interviewing (CAWI)

methodology. The target population included SMEs operating in the Marche region. A

total of 134 companies took part voluntary in the survey.

Main Results: As regards the first phase of crisis management, namely pre-crisis, the

investigated SMEs are still far from having developed a proactive attitude to business

crises. Concerning the crisis phase, on the other hand, the results obtained denote a

143

positive attitude by SMEs, especially about crisis communication, which seems to play a

fairly important role. Finally, with regard to the post-crisis phase, the level of readiness of

the SMEs under study can be considered positive overall; in fact, most of them recognise

the importance of post-crisis learning.

Value and Implications for Theory and Practice: This study contributes to enriching

studies on the topic of crisis management by deepening SMEs, which represent an

interesting setting of analysis for both academics and practitioners. It also offers

managerial implications. First, it would be particularly useful to involve heterogeneous

tools in monitoring the internal and external environment. Second, a crisis management

plan could be crucial, as it allows for a disciplined and timely response to the crisis.

Third, a crisis management team could prove very useful in coping with the complexity

involved in a crisis management process.

Keywords – Company crises, Crisis management, SMEs, Crisis management process,

Crisis management tools.

Paper type – Practical Paper

1. Introduction

Due to the continuous and rapid changes in economic, political, and social scenarios,

the centrality of crisis and its management within the business environment has been

increasingly recognised. Historically, the life path of a company has always been

characterised by alternating phases of success and crisis (Doern et al., 2019), which must

be addressed with the right readiness to achieve positive evolutionary results. Over the

years, growing attention has been given to the topic of crisis and its management by

entrepreneurs, moving from the concept of crisis as a particular moment in the lifetime of

a company to that of crisis management. In particular, crisis management is understood as

a continuous process that develops within the company and makes it aware of its

vulnerability to specific negative events, thus supporting it in dealing with them

effectively (Khodarahmi, 2009). In the context of small and medium-sized enterprises

(SMEs), this process takes on extreme relevance due to the lack of adequate resources and

skills (Marullo et al., 2020), which makes them particularly fragile in the face of adverse

and traumatic phenomena (Pencarelli et al., 2020).

Considering the crucial role of SMEs for the development and well-being of national

and regional economies (Björklund et al., 2020; Brown and Cowling, 2021; Doern, 2021),

deepening the topic of crisis management within this type of organisation is extremely

important. In the European Union (EU) there are 25 million SMEs, which make up 99%

of all enterprises, employ around 100 million people and generate around 56% of the EU

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gross domestic product3. Only in Italy, 160,000 companies fit into the European definition

of small and medium-sized enterprises and generate a total added value of EUR 204

billion (Rapporto regionale PMI, 2022). Despite this evident relevance, SMEs approaches

to crisis management still appear to be poorly explored and investigated (Kurschus et al.,

2017; Eggers, 2020; Fasth et al., 2022; Salamzadeh and Dana, 2022). In this perspective,

the aim of the study is to analyse how the discipline of crisis management may be applied

within the framework of Italian small and medium-sized enterprises, with particular focus

on those in the Marche region. More specifically, the research questions that this work

intends to address are: (i) Do SMEs in the Marche region adopt a reactive, proactive or

passive attitude with respect to crisis management? (ii) In SMEs in the Marche region,

who is responsible for crisis management? (iii) How do the SMEs in the Marche region

behave when the crisis occurs? (iv) How important is taking care of the communication

aspects during a crisis for the SMEs in the Marche region? (v) How do the SMEs in the

Marche region behave once the crisis is over? To answer these questions, a quantitative

analysis was developed by means of a survey questionnaire; a total of 134 companies

located in the Marche region participated in the study.

The present paper is organised as follows. The first section offers a theoretical

framework on business crisis and crisis management, paying particular attention to the

tools that companies have at their disposal to effectively cope with crisis events. In the

second section, the research methodology deployed, and the results achieved are

presented. Finally, the third section provides the main conclusions and academic and

managerial implications, as well as limitations and suggestions for future research.

2. Literature Review

The economic-managerial literature has developed multiple definitions of business

crisis over time (Guatri; 1995, Pearson and Clair, 1998; Sciarelli, 2011; Coombs, 2007;

Pencarelli, 2013), thus making it complex to develop a unitary formulation. To fully

understand the topic, it is therefore useful to start from the distinction between the

concepts of business decline and crisis. The first can be understood as a phase of erosion

of the company's profitability and weakening of its image towards stakeholders, in which

3Stato dell’Unione delle PMI (2021), available online on

https://www.europarl.europa.eu/RegData/etudes/ATAG/2021/690633/EPRS_ATA(2021)6

90633_IT.pdf (last access on 20 March 2023).

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there is a decay that affects both the quality of products or services and relations with

customers and suppliers (Guatri, 1995). During the decline, there is a negative impact on

the entire vitality of the company (Pencarelli, 2013), which inevitably leads to a state of

general instability. When this instability becomes systemic and irreversible and effective

recovery measures are not implemented (Guatri, 1995; Sciarelli, 2011; Pencarelli, 2013),

the state of decline turns into a crisis. The latter can thus be qualified as the acute phase of

a particular pathological situation that compromises the company's economic and

financial equilibrium, seriously compromising its ability to generate value (Sciarelli,

2011; Ciambotti, 2005; Pencarelli, 2013).

A crisis state is not always reached along a path of progressive escalation of critical

dimensions for the long-term survival of the company (Pencarelli, 2013). Sometimes,

there are sudden changes of scenario, both internal and external, that place the company

directly in the crisis phase. In general, the factors underlying the decline and crisis of

enterprises can be mainly referred to two opposing approaches, namely the

subjective-behaviourist and objective ones (Guatri, 1995). According to the first strand,

the main cause of the crisis is ascribable to the human factor, which becomes responsible

for mismanagement, managerial inadequacy, and incompetence, as well as incorrect

decision-making assessments (Paoloni, 2003; Pencarelli, 2013). On the contrary, the

objective approach recognises the vulnerability of the company to the occurrence of

specific and complex external phenomena, such as drastic decreases in demand, increases

in production factors, catastrophic events, global economic crises, sector issues,

exacerbation of stakeholder relations, changes in the competitive, legislative, social and

technological environment (Pencarelli, 2013; Provvisiero, 2014; Mayr et al., 2017). In

this perspective, the business crisis is thus the result of adverse events that can occur both

inside and outside the business context (Sciarelli, 1995). Despite this distinction, it should

be stressed that the internal and external variables at the origin of the crisis are strongly

interconnected (Palazzi et al., 2018). The crisis process, in fact, is triggered by the

inability of top management to effectively combine the turbulence and instability of the

external environment with the complex internal dynamics, due to a lack of adequate

resources and skills (Peterson et al., 1983; Coda, 1983; Pencarelli, 2013).

In addition to distinguishing between internal and external causes, the literature has

also identified different types of business crises. Although this is not an exhaustive list,

the classification formulated by Guatri (1995) is particularly useful in understanding the

different crisis situations that a company may face during its lifetime. Specifically, it is

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possible to identify (Guatri, 1995): (i) inefficiency crisis, which occurs when one or more

company functions operate with returns that are not in line with those of competitors; (ii)

overcapacity crisis, which is caused by an excessive production capacity that is not

absorbed by the surrounding environment due to a decrease in demand, a sector crisis,

and so on; (iii) product obsolescence crisis, which manifests itself when the product is no

longer attractive to consumers. This, leads to a loss of market share and a reduction in

margins between prices and costs; (iv) crisis from lack of planning/innovation, which

arises from the inability to adapt the conditions of management to environmental changes,

accompanied by insufficient and/or ineffective innovation processes (v)

economic/financial crisis, which translates into an imbalance in the income dimension

that generates economic losses affecting the value of the company's capital and into a

compromised solvency capacity in the short and medium-long term from a financial point

of view (Pencarelli, 2013). Moreover, crises may be temporary or irreversible. In the first

case, timely remedial action or favourable environmental and market conditions can

reverse the trend and return the company to a state of regular operation; irreversible

crises, on the other hand, lead to situations of instability that inevitably lead to the end of

business activity (Pencarelli, 2013). Finally, Hahn (1988) divides crisis into: (i) potential,

that is, manifestation linked to the developments of the company's reality and contexts;

(ii) latent, meaning the occurrence is highly probable and is linked to the existence of

specific implicit and adverse conditions; (iii) acute, namely actual appearance.

Regardless of the different peculiarities and possible forms of manifestation, the crisis

has always accompanied the enterprise throughout its life path (Doern et al., 2019).

Recent years have been characterised by a deep and long recessionary phase, which has

severely challenged enterprises and their competitive capacity. Furthermore, there have

been many crises resulting from unexpected natural phenomena such as earthquakes,

floods and, most recently, the coronavirus pandemic. The instability of the environment,

both socially and naturally, has made it essential for companies to implement useful plans

to cope with any phenomenon capable of generating imbalances (Coombs and Laufer,

2018). In this scenario, the concept of crisis management finds affirmation, not only in the

sphere of large, structured, and rigid companies, but also in smaller companies (Spillan

and Hough, 2003), which are more exposed to all kinds of difficulties and with limited

resources. Over the years, the centrality of the crisis and its management by entrepreneurs

has been increasingly recognised, moving from the concept of crisis as a particular

moment in the life of a company to that of crisis management. In particular, crisis

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management is understood as an ongoing process that develops within the company and

makes it aware of its vulnerability to certain negative events, thus supporting it to deal

with them effectively (Khodarahmi, 2009). Hence, crisis management does not only deal

with management activities during a crisis, but includes activities before, during and after

a crisis event occurs. In this sense, scholars agree that the crisis management process

consists of three phases: pre-crisis or research, crisis or response, and post-crisis or

recovery (Coombs, 2007). The pre-crisis phase is aimed at anticipating, avoiding or

eventually minimising a possible crisis. To this end, the drafting of a crisis management

plan and the establishment of a crisis management team become essential (Barton, 2001;

Coombs, 2007). The crisis management plan is not a guideline on how to manage the

crisis, but rather a tool that defines in advance several tasks, gathers key information and

serves as a reference source to optimise timing during the onset of a crisis (Barton, 2001;

Fearn-Banks, 2001; Coombs, 2007). To pre-assign tasks and responsibilities, a crisis

management team should therefore be created. The members of this team must be

adequately trained in the roles to be filled and the activities to be performed during a

crisis (Mitroff et al., 1996; Coombs, 2007). In addition, it is necessary to identify one or

more people who will be in charge of communicating with all media during the crisis;

their role will be crucial for corporate reputation and credibility (Lerbinger, 1997,

Fearn-Banks, 2001; Coombs, 2007). Other particularly useful tools to intercept and

promptly manage the first signs of danger may be the indicators contained in the New

Code on Business Crisis and Insolvency (Legislative Decree No. 14 of 12 January 2019),

strategic analysis tools and techniques such as the business formula model, planning and

control systems and the balance scorecard (Bazzerla, 2018; Baldissera, 2019; Bogarelli,

2020). In the response phase, the crisis manifests itself concretely so the company should

mobilise to contain the damage through the implementation of the crisis management

plan. There are three objectives to be pursued: (i) rapidity in providing a valid response to

stakeholders on the incident; (ii) accuracy in the information to be disclosed; (iii)

consistency in the communication of news and content (Coombs, 2007). The company

will thus be able to demonstrate its control over the crisis situation that has arisen, while

safeguarding its credibility and reputation (Carney and Jorden, 1993; Coombs, 2007). The

possibility of successfully managing a crisis situation is strongly linked to the

organisation's ability to communicate correctly and proactively with its stakeholders

(Mazzei and Ravazzani, 2015; Diers-Lawson, 2019). Although crisis management

depends primarily on the company's capacity for strategic management, the

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communication factor plays a decisive role in the chances of ultimate success. This

communication must not only be directed externally, namely to institutions, customers,

suppliers, and associations, but also and above all internally, that is to employees and

trade unions (Adriani, 2013). Nowadays, it is also increasingly important to be able to

manage crisis dissemination on social media (Civelek et al., 2016; Maal and

Wilson-North, 2019; Wang and Cai, 2021), avoiding the sharing of incorrect content that

compromises the corporate image. In addition to crisis management and communication,

the Master Events Log (MEL), the Briefing Cycle and the Emergency Operations Room

(EOR) can also be valuable support tools (Burton, 2016; 2017). Finally, the post-crisis

phase is designed to verify the ex-post effectiveness of the actions taken in the previous

steps, to communicate the results achieved in order not to lose stakeholders' trust and to

initiate a learning process to improve the internal crisis management process (Coombs,

2007; Cucculelli, 2017). A careful evaluation of the actions taken in managing the crisis

that has just ended is essential to identify strengths and weaknesses on which to intervene

to better face possible future crises. In this sense, the tool elaborated by Folsom and

Garrettson (2020) is particularly interesting, which subdivides the post-crisis review into

four main moments: (i) basic analysis on the preparedness of the crisis management

action; (ii) assessment of responsibilities; (iii) review of company performance; (iv)

examination of the future usability of the implemented crisis management plan.

It is therefore clear that crisis management is a necessary and fundamental process for

reacting to crisis situations in a disciplined and timely manner, thereby significantly

reducing the scope of its impact. The continuous succession of unexpected and traumatic

events has renewed the interest of academics and practitioners in the topic of crisis

management. However, implementing an adequate and efficient crisis management

process appears to be quite complex, especially for small and medium-sized enterprises

(Hong et., 2012; Alves et al., 2020). Although such organisations have the inherent ability

to be flexible and to adapt quickly to sudden changes in the market (Cesaroni and Sentuti,

2016; Pencarelli et al., 2020), the frequent scarcity of financial, technological, and

organisational resources and adequate skills (Pace, 2013; Marullo et al., 2020)

significantly weakens their response to negative phenomena. Given the extreme

importance of SMEs for the development and prosperity of national and regional

economies (Björklund et al., 2020; Brown and Cowling, 2021; Doern, 2021), delving into

the topic of crisis management within this category of organisations is highly valuable

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and could make important contributions to the literature on the subject, as well as offer

interesting food for insights for entrepreneurs and managers of such companies.

3. Research Methodology and Results

To observe the level of preparedness with respect to crisis management, the

conception of the event and the way in which the different phases of the crisis

management process are dealt with in small and medium-sized enterprises in the Marche

region, a quantitative analysis was developed by means of a survey questionnaire. The

questionnaire, carried out through computer-assisted web interviewing (CAWI)

methodology, is structured in four main sections. Specifically, the first section was

dedicated to the collection of anagraphic-descriptive information concerning the company

and the history of company crises. The remaining three sections of the questionnaire were

defined following the phases into which Crisis Management is divided, in line with what

is presented in the literature. Therefore, a section focused on the pre-crisis phase, one

dedicated to the crisis phase and finally another section on the post-crisis phase was

developed. In the section dedicated to the pre-crisis phase, the monitoring tools used by

SMEs to catch the premonitory signs of the crisis were investigated; the possible

preparation of the crisis management plan and the establishment of a crisis management

team; and the knowledge of the New Business Crisis and Insolvency Code (Legislative

Decree 14/2019). The latter aspect was analysed with the aim of assessing whether SMEs

are aware of the novelties introduced by this decree and, if so, to obtain their opinion with

respect to the usefulness that the hierarchical system of alert indexes may actually hold in

preventing a crisis. The section on the crisis, on the other hand, explores the habit of

SMEs of keeping track of all the main stages that develop as the crisis evolves, for

example by putting them in writing in a special document; the importance attributed to

internal and external communication of the crisis, especially in terms of rapidity, accuracy

and consistency; and the holding of periodic meetings within the company to discuss and

debate the crisis situation. The last section of the questionnaire refers to the post-crisis

phase and explores the management of post-crisis communication with respect to

stakeholders; the importance given by SMEs to obtaining feedback on the management of

crises that have now ended; the organisation of post-crisis meetings with their employees

in order to highlight both best practices and failures.

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The research questionnaire was sent - from June to August 2021 - to a sample of

1,600 small and medium-sized enterprises (SMEs) operating in the Marche region. Such

SMEs were selected according to the definition proposed in the European Commission

Recommendation 2003/361/EC on 6 May 2003; therefore, the research target included all

those companies with registered offices in the Marche region, employing less than 250

people and with an annual turnover not exceeding EUR 50 million (or alternatively an

annual balance sheet not exceeding EUR 43 million). Based on this consideration, an

online search was conducted to identify a group of SMEs for each of the five provinces in

the Marche region. Afterwards, the different company websites were consulted to collect

the necessary contact information for the administration of the questionnaire by e-mail. A

total of 134 companies took part in the survey.

The decision to limit the research to SMEs in the Marche region stems from the

importance of these companies for the region's economy, which represent 99.9% of the

regional industrial fabric (Le imprese nella regione Marche, 2020).

3.1 Results

3.1.1 General information on the sample

The questionnaire data concerning the biographical-descriptive profile of the 134

SMEs participating in the survey are presented in Table 1. Regarding the sector, it

emerged that most of them operate in the secondary sector (69.40%), followed by those

operating in the tertiary sector (19.40%) and finally those active in the primary sector

(11.19%). About age, only two companies were founded before 1900 (specifically, in

1897). In the other cases, the year of foundation ranges from 1950 onwards, up to the

youngest, which was founded in 2020.

Table 1: Economic sector and foundation year of SMEs.

Sector

PRIMARY SECTOR:

11,19%

-Primary unspecified

6,67%

-Agriculture

80,00%

-Livestock farming

6,67%

-Renewable energies

6,67%

SECONDARY SECTOR:

69,40%

-Unspecified industry

1,08%

-Textile industry

7,53%

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-Food industry

4,30%

-Cosmetics industry

3,23%

-Shoe and leather industry

8,60%

-Wood-furniture industry

10,75%

-Glass industry

2,15%

-Plastic industry

6,45%

-Marble industry

1,08%

-Paper industry

1,08%

-Metal industry

32,26%

-Electronics industry

4,30%

-Marine industry

1,08%

-Building industry

9,68%

-ICT

6,45%

TERTIARY SECTOR:

19,40%

-Services not specified

23,08%

-IT consultancy services

15,38%

-Translation services

3,85%

-Trade services

26,92%

-Distribution

3,85%

-Transport services

3,85%

-Tourism services

3,85%

-Housekeeping

3,85%

-Healthcare

7,69%

-Graphics and advertising

3,85%

-Environmental Surveys

3,85%

Foundation year

1897

1,49%

1950 – 1959

4,48%

1960 – 1969

5,22%

1970 – 1979

11,19%

1980 – 1989

15,67%

1990 – 1999

17,91%

2000 – 2009

14,93%

2010 – 2019

28,36%

2020 – today

0,75%

Source: own elaboration.

In addition, the history of crises faced by companies over time was explored (Table

2). The majority of the SMEs participating in the study (76.12%) had to face between 1

and 5 crises during their corporate life. Moreover, among those SMEs that had faced at

least one crisis, the majority (88.50%) believed that such events were effectively

managed. This confirms what has been pointed out in the literature, which shows that no

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company is exempt from crisis risk and that one should ask not so much if a crisis will

occur, but rather when and what kind of crisis will occur (Brown, 2019).

Table 2: History of SME company crises.

Total crises managed

No crisis

15,67%

From 1 to 5 crises

76,12%

102

More than 5 crises

8,21%

Effectiveness of past crisis management

Yes

88,50%

100

11,50%

Source: own elaboration.

3.1.2 Pre-crisis section

With respect to the pre-crisis phase, 62.69% of the surveyed SMEs stated that they

monitor the internal and external environment to catch pre-crisis warning signs (Table 3).

Specifically, the tools mainly used to carry out such monitoring are those of planning and

control (58.33%). This is followed by activities concerning the calculation and evaluation

of budget indices (17.86%), strategic analyses and evaluations (13.10%) and the use of

the Balanced Scorecard tool (2.38%).

Table 3: Detection of premonitory signs of crisis by SMEs.

Implementation of internal/external environment

monitoring activities to detect premonitory signs of crisis

Yes

62,69%

37,31%

Type of activities carried out to monitor the

internal/external environment and to catch premonitory

signs of crisis

Planning and control

58,33%

Calculation and evaluation of balance sheet ratios

17,86%

Strategic analysis and evaluation

13,10%

Balanced Scorecard

2,38%

Other

8,33%

Source: own elaboration.

Despite the importance given to the drafting of a crisis management plan and the

creation of a crisis management team to effectively deal with negative phenomena

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(Barton, 2001; Coombs, 2007), the majority of SMEs (86.57%) stated that they do not use

such tools. Many of them (88.06%) also specified that it is the entrepreneur himself who

manages any crisis (Table 4).

Table 4. Definition of Crisis Management Plan and Crisis Management Team by SMEs.

Definition of Crisis Management Plan

Yes

13,43%

86,57%

Definition of Crisis Management Team

Yes

5,22%

No, crisis management is assigned to the entrepreneur

alone

88,06%

No, crisis management is assigned to professionals

outside the company

6,72%

Source: own elaboration.

Finally, 72.39% of the companies surveyed stated that they were not aware of the

innovations introduced by the New Code of Business Crisis and Insolvency (Legislative

Decree 14/2019) in preventing crises. Among the SMEs in the sample that are aware of

the decree and therefore the hierarchical system of alert indices presented in it, it is

interesting to note that 56.76% do not believe that this system is actually useful in

predicting and preventing a crisis situation (Table 5).

Table 5: SMEs' knowledge of the New Business Crisis and Insolvency Code (Legislative

Decree 14/2019).

Knowledge of the New Business Crisis and Insolvency Code

(Legislative Decree 14/2019)

Yes

27,61%

72,39%

Usefulness of the hierarchical system of alert indices

presented in the decree

Yes

43,24%

56,76%

Source: own elaboration.

3.1.3 Crisis Section

Despite the importance emphasised in the literature regarding tracking, most of the

responding SMEs (60.45%) do not keep a record of crisis-related events (Table 6).

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Table 6: Recording/tracking of crisis-related events by SMEs.

Yes

39,55%

60,45%

Source: own elaboration.

Figure 1 shows the degree of attention with which the SMEs in the sample

communicate information about the crisis, both internally and externally to the company.

In this regard, the majority of the sample (87.31%) showed themselves to be attentive to

crisis communication activities, with values ranging from 3 (indifferent) to 5 (high degree

of attention) being predominantly attributed to them.

Figure 1: Degree of attention of SMEs in providing information on the crisis, internally

and externally to the company.

Source: own elaboration.

Based on the factors identified by Coombs (2007) regarding crisis communication,

three questions were then asked regarding the importance SMEs attach to rapidity,

accuracy, and consistency in crisis communication. A large majority of SMEs (81.34%)

attributed a medium to high degree of importance to the rapidity of communication, while

a small percentage of respondents (18.66%) did not attribute significant importance to this

element (Figure 2). About the precision and accuracy of the information provided,

40.30% of the SMEs surveyed assigned a very high degree of importance to these

elements, while only a few SMEs assigned a low degree of importance to this factor

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(5.97%) (Figure 3). Similarly, the element of consistency was considered extremely

important by the majority of the sample (45.52%), who assigned this element a value of 5

(Figure 4).

Figure 2: Degree of importance given by SMEs to the element of timeliness in crisis

communication.

Source: own elaboration.

Figure 3: Degree of importance given by SMEs to the element of accuracy/precision in

crisis communication.

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Source: own elaboration.

Figure 4: Degree of importance given by SMEs to consistency in crisis communication.

Source: own elaboration.

At the end of the section, the sample was asked about the periodic holding of

meetings within the company to discuss crisis situations. In line with what was suggested

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by Burton (2017), most of the SMEs studied used to hold periodic meetings during the

crisis period (76.12%), with the aim of sharing information internally and establishing

future strategies (Table 7).

Table 7: Organisation of meetings during the crisis period.

Yes

76,12%

102

23,88%

Source: own elaboration.

3.1.4 Post-crisis section

Observing Table 8, it emerges that most of the responding SMEs (60.45%) are

attentive to post-crisis communication, trying to inform the relevant stakeholders about

the company's recovery situation.

Table 8: Implementation of post-crisis communication.

Yes

60,45%

39,55%

Source: own elaboration.

Thereafter, the importance that SMEs recognise in obtaining feedback on the

management of closed crises was explored. Again, they were asked to express a degree of

importance on a scale of 1 to 5. The answers obtained show that the majority of SMEs

consider this element important (88.80%), attributing it values ranging from medium to

high (Figure 5). It is only through a careful evaluation of past crises, in fact, that

companies can be stronger and more resilient to possible future crises (Folsom and

Garrettson, 2020).

Figure 5: Degree of importance given by SMEs to obtaining feedback in relation to crisis

management ended.

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Source: own elaboration.

Finally, the majority of SMEs participating in the survey (61.19%) stated that they

carry out post-crisis meetings with their employees in order to be able to highlight best

practices, which are useful in view of future crisis management (Table 9).

Table 9: Organisation of post-crisis meetings in SMEs.

Yes

61,19%

38,81%

Source: own elaboration.

4. Conclusions

Although crisis management has long been a subject of study in managerial and

organisational theory, the magnitude and persistence of recent political, economic and

health crises have once again made this topic of extreme topicality and interest. This

attention is even more important in the context of small and medium-sized enterprises,

which have always appeared particularly vulnerable in the face of crisis situations

(Pencarelli et al., 2020). With the aim of investigating how Italian SMEs, and in particular

those in the Marche region, conceive the crisis and how they manage it, a quantitative

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survey was conducted based on the administration of a specific research questionnaire.

The results show that only a small number of SMEs surveyed had never had to manage

crisis situations. With respect to these, the year of foundation is quite heterogeneous; the

oldest SME was founded in 1950, while the youngest SME was founded in 2019. From

this it can be deduced that a company can operate for many years without necessarily

encountering a crisis, although this does not make it immune to future crises. In this

regard, the Crisis Management theory suggests conceiving the crisis as a normal event in

corporate life, which will hit the company sooner or later (Bazzerla, 2018). Regarding the

first phase of crisis management, the pre-crisis phase, the SMEs surveyed are still far

from having developed a proactive attitude towards company crises. Although most

companies state that they monitor the internal and external environment, the main tools

used to carry out this activity focus mainly on monetary aspects, while crises can result

from different causes (Paoloni, 2003; Pencarelli, 2013; Mayr et al., 2017). Concerning the

crisis phase, on the other hand, the results obtained denote a rather positive attitude by the

SMEs interviewed, especially as regards crisis communication, which, from what

emerged, seems to play a fairly important role. Consistent with what is suggested in the

literature (Coombs, 2007), the companies analysed are also used to organising meetings

during the crisis period to become fully aware of the situation and to study the most

appropriate strategies to be undertaken. On the contrary, few SMEs in the sample reported

having prepared a crisis management plan and having set up a crisis management team,

although these tools are considered essential (Barton, 2001; Coombs, 2007). With specific

reference to the establishment of the crisis management team, SMEs point out that the

management of possible crises is generally left to the entrepreneur alone. Finally, as

regards the post-crisis phase, the level of preparedness of the SMEs surveyed can be

considered positive overall; in fact, most of them recognise the importance of post-crisis

learning. As pointed out by Folsom and Garrettson (2020), a careful assessment of the

strengths and weaknesses of crisis management is crucial to better cope with possible

future crises.

The study presents both academic and managerial implications. This paper contributes

to enriching studies on this topic by deepening and investigating small and medium-sized

companies, which represent an interesting setting of analysis for both academics and

practitioners. It is crucial for owners and managers of SMEs to prevent business

disruption and economic damage resulting from crisis situations. In this respect, the study

offers some insights on how SMEs can effectively manage the different stages of crisis.

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Among the other managerial implications, it would be particularly useful to involve

heterogeneous tools in monitoring the internal and external environment, thus being able

to consider both monetary and non-monetary aspects. Moreover, a crisis management

plan could be crucial, as it allows for a disciplined and timely response to the crisis, thus

greatly reducing the scale of its impact. Finally, a crisis management team could prove

very helpful. Indeed, a proper crisis management process is particularly challenging to

implement and doing it individually could be particularly difficult and time-consuming.

Lastly, some limitations are also present. The sample of companies surveyed is small

and limited to the Marche region. In the future, it would be interesting to extend the

research to a larger number of small and medium-sized enterprises, also involving those

operating in other Italian regions. In this way it will be possible to make a comparison

within the national context, identifying the needs of this category of companies to

implement an adequate and effective crisis management.

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163

Russia-Ukraine invasion: a study on the geopolitical

and energetic scenarios and the effects on the Italian

SMEs

Maria Grazia Strano

Department of Economics and Business

University of Catania

Palazzo delle Scienze - Corso Italia, 55 - 95129 Catania

E-mail: maria.strano@phd.unict.it

Simone Rinaldi

Department of Social and Political Sciences

University of Catania

Palazzo Pedagaggi - Via Vittorio Emanuele II, 49 - 95131 Catania

E-mail: simone.rinaldi@phd.unict.it

Abstract

The war in Ukraine is having significant and dramatic consequences for both countries

involved and worldwide in many aspects. The energy sector is one of the key areas

affected by the conflict: leading directly and indirectly to widespread disruptions in gas

supplies to the EU countries. Leaving aside that Ukraine is a relevant transit country for

Russian gas to Europe, sanctions, bans, and the reaction of the Western countries

influenced primarily the energy market causing instability and concerns about energy

security. The crisis has highlighted a concept that is not new: the need for the European

Union to reduce dependency levels on Russian gas by diversifying its energy sources and

raw materials supply. The increase in energy prices has had an unfavourable impact on

small and medium enterprises (SMEs). Therefore, this has led to a decrease in profits for

Italian SMEs, caused by increasing production costs. Because of these events, it is

possible to observe a higher business churn rate, pointing out that SMEs are suffering and

struggling to remain competitive in their market. The impact of the conflict and the

increased energy prices pushed the Italian SMEs to employ strategic cost management

thinking to mitigate the risks and the damages, exploring alternative and green energy

sources and implementing energy efficiency. With an interdisciplinary approach to the

different fields of geopolitics and management, this study aims to provide a theoretical

contribution by giving an overview of the political and economic situation and an insight

into the market condition of Italian SMEs. In particular, using past EUROSTAT data

concerning the cost of energy for non-household consumption, energy inflation rate, and

business churn rate, the research provides estimates of data not yet published by

EUROSTAT and shows the relationship between these variables, highlighting the

statistical effect of the rise in electricity costs on the business churn rate, regarding Italian

SMEs. The war in Ukraine is having significant and dramatic consequences for both

countries involved and worldwide in many aspects. The energy sector is one of the key

areas affected by the conflict: leading directly and indirectly to widespread disruptions in

164

gas supplies to the EU countries. Leaving aside that Ukraine is a relevant transit country

for Russian gas to Europe, sanctions, bans, and the reaction of the Western countries

influenced primarily the energy market causing instability and concerns about energy

security. The crisis has highlighted a concept that is not new: the need for the European

Union to reduce dependency levels on Russian gas by diversifying its energy sources and

raw materials supply. The increase in energy prices has had an unfavourable impact on

small and medium enterprises (SMEs). Therefore, this has led to a decrease in profits for

Italian SMEs, caused by increasing production costs. Because of these events, it is

possible to observe a higher business churn rate,pointing out that SMEs are suffering and